You cannot remove the first volume on the disk - Mac How can I remove "First Volume"(Macintosh HD) on the disk. Minus sign is grayed out. 
Unable to remove it via recovery either. 
Even if I erase the volume, I can't use that space for macOS10.12.1... volume.
You can't work on the volume you are booted from.  The recovery mode is a minimalist partition at the start of the volume.

Easiest way is to create a bootable USB stick, boot from that.

A second way is to install onto a external hard drive, boot from that, then work on your main disk.