KS ROM should be fine, because you get that far (amigados shell). My guess is that UAE makes any HD/filesystem/hardfile bootable and it boots from it no matter if you have OS installed or not.

When you have inserted the Install disk in df0: (ctrl-alt-f1), try to reset the emulator (ctrl-alt-r) and it should then boot from the inserted floppy image. And if that doesn't work, define install floppy image in .uaerc (floppy0=WB3.1-Install.adf).

In any case it should boot from floppy first instead of hd, but if it isn't the case with uae, then try to hold both mousebuttons on boot to get into Amiga's early startup menu and select to boot from df0: there.