[Verizon Galaxy Note 3 Q&A, Help & Troubleshooting] bftb0:
Read this all the way through - twice at a minimum. You should understand how and why every step works before you begin. You should also verify md5 signatures of any files transferred around from place to place. (busybox and twrp both have "md5sum" command). You know - compute the MD5's after extracting them from the Odin archives, and then verify the same md5 sigs after you move/copy them to the phone /sdcard

Your idea that a "factory reset" with the stock recovery alone is going to return your phone back to factory stock is not sound.

You can rewrite the /system partition by booting into a custom recovery and using one other small trick*. If you were to then also overwrite the recovery partition with the stock recovery in the same (custom recovery boot) session, you would be able to:

1) boot into the stock recovery and

2) use the stock recovery (and a stock /system) to perform a factory reset.

This would give you a completely stock phone that has been factory reset, but with one small flaw: that your Knox warranty flag was blown to 0x1. (From everything you've said we think it is already blown, though)

twrp-3.0.2-0-hltevzw-4.3.img dd'ed into the recovery partition will let you do these operations via a terminal command session from the screen of the phone. No USB port needed, no ADB needed. All you will need to do is get the .img files onto the phone, either with a SDcard or wirelessly on a LAN/dropbox, etc.

0) Get the Stock Odin Tarball corresponding to your (rooted) ROM release (e.g. sammobile.com) ; use "tar" or 7-zip to extract "recovery.img" and "system.img" from this tarball.

1) Download twrp-3.0.2-0-hltevzw-4.3.img from twrp.me and get it onto your /sdcard (internal)

2) Get the stock "recovery.img" file (from the Odin tarball) onto your phone's /sdcard

*3) Convert the "system.img" file (from the Odin tarball) into a non-sparse system image file via the "simg2img" command, e.g.

<Unix-prompt>$ simg2img system.img system-nonsparse.img

I don't know if the Windows version of Google/Android developer tools has the "simg2img" tool; if not you are going to have to do this in a Linux VM (e.g. Ubuntu).

4) Get the latter file ("system-nonsparse.img") onto your phone /sdcard

5) From a root shell (in your current rooted ROM, use a terminal emulator and type "su" to get a root prompt)

dd if=/sdcard/twrp-3.0.2-0-hltevzw-4.3.img bs=2048 of=/dev/block/mmcblk0p15

this installs the custom TWRP recovery to your recovery partition

6) Boot into the TWRP recovery. Using Advanced->Terminal in TWRP, then:

7) dd if=/sdcard/recovery.img bs=2048 of=/dev/block/mmcblk0p15

(this step puts the stock recovery back onto the phone)

8) dd if=/sdcard/system-nonsparse.img bs=2048 of=/dev/block/mmcblk0p23

(this step puts the full stock /system back onto the phone)

9) Do a "reboot recovery" in TWRP. This will put you into the stock recovery, from which you can do a full factory wipe.

Voila! Factory Firmware and wiped - but with a blown Knox Warranty flag.

* the "one other small trick" is to convert the "system.img" file found in the stock Odin tarball to a non-sparse image using the Android tool "simg2img". Normally this unpacking job is handled by the bootloader when Odin is uploading the (sparse) system.img file to the phone, but you would be putting system.img back onto the phone by raw-writing it with "dd" the same way you would manually flash a recovery image to the recovery partition (using "dd").

The thing is, based on everything you have said so far, your phone already has a blown Knox Warranty flag. (Either that or you had a Developer Edition phone, or are confused about the difference between a true custom recovery and a fake one that lives inside safestrap). But what the heck, if that's the case, at least the phone will look fully stock if it is booted normally, and that's at least a little bit of an improvement.

This won't fix the Knox Warranty fuse; the only thing it will fix is the appearance of the "Custom" icon during booting. (Getting this to go away might even require booting the fully reset stock ROM and letting it run for a while as well so that the stock attribution processes can complete).

If you do this, you have to understand the whole process all the way through, as you will only have one chance at it. As soon as you have re-written the /system partition and put the stock recovery back on the phone, root is gone at that point. (Additionally note that step 8 CAN NOT be accomplished with the normal ROM booted - it can only be done from a custom recovery. You will lock up the system and the write will fail if you try it from the "regular" ROM.)

good luck.