Customize reset password form redirect problem

You can add the following to your functions.php to achieve what you are after. The action init doesn’t seem to fire in time for what you are looking for.

if($_GET['action']==='rp' && strpos($_SERVER['REQUEST_URI'],'wp-login.php')) {
    $key = isset( $_GET['key'] ) ? $_GET['key'] : '';
    $login = isset( $_GET['login'] ) ? $_GET['login'] : '';
    wp_redirect( site_url( '/reset-password/' ) . '?key=' . $key . '&login=' . $login );
    exit;
}