Another approach ...
Create an aux track by inserting a new audio track and setting the input to a new patchpoint
Set the output of the new track to NONE
Create a new send on Master to the new patchpoint
Set punch in/out markers for the region you want to capture
Rec arm the new track and enable input echo
Press the transport REC button
The project will play back with the region bound by punch markers being recorded to the aux track. Stop recording, unarm the new track, disable input echo and do whatever you wish with the new clip; make it a groove clip and stretch it out however many iterations you like.
It's not as complicated as it looks/reads