Good, clean question, Ron. Nice work!
I conceived your quest statement as 'The Single Defining Select Statement of View Definition' as shown in code segment 1 above.
The question explicitly states: "Can a View be created using a CTE as part of
its defining SELECT statement.?" The emphasized part makes it very clear that the question was not about creating a view using only
a CTE as its definining SELECT statement.
Hugo Kornelis, SQL Server/Data Platform MVP (2006-2016)
Visit my SQL Server blog: http://sqlblog.com/blogs/hugo_kornelis