For what it's worth, I think that the inner layer of wraps is done with paracord sheath only - in other words, the second piece that makes the inner wraps has the core stripped out to make it thinner and less bulky.
One idea for how to add the second piece: place your outer wrap as you have done in your first photo. Take one end of the sheath and lay it in between the two strands of the outer wrap on the backside of the handle, so the very end of the sheath is at the midpoint and the rest of the sheath runs toward the blade end. At the same time, run the strands of the outer wrap over the blade end of the knife. You'll have two strands of regular cord on one side of the blade and a single strand of sheath on the other side.
Now pinch the sheath at the point that you want to start making wraps and make a 90 degree turn, then start wrapping back toward the butt end of the handle. Try to get at least one or two turns of the sheath to lie over the the outer wrap in between the blade and the little loop of outer sheath that pokes up through the handle from the back side. Continue wrapping toward the butt end, leaving the last couple of wraps looser. Tuck the free end of the sheath under the last couple of wraps and nestle it between the parallel strands of the outer wrap, again on the backside of the knife. Bring the free end of the sheath out from between the wraps at the point that it butts up against the end that is already covered.
Gradually work the slack out of the sheath until things are nice and tight, then cut the sheath and either heat-seal the end or just let friction keep it secure.
If you use regular paracord for the inner wrap, rather than just the sheath, the result is likely to be much too bulky, especially for a smaller knife handle.
