Windows 7 Embedded always runs explorer.exe on boot despite registry being set to run nothing

You can us a program like AutoRuns to determine where explorer.exe is starting from, provided that you can run it since it is an embedded system.

You can uncheck the explorer.exe entry from within AutoRuns to disable it from starting.

This utility, which has the most comprehensive knowledge of auto-starting locations of any startup monitor, shows you what programs are configured to run during system bootup or login.