iPad - 'Reset Encrypted Data' - Request for advice

[bluecoast]

Does anyone know what happens if you:

- Reset your encrypted data on a device when you have forgotten your previous passcode
- & what this does exactly?

Here's the issue in full:

• A friend (not me ) forgot their passcode on their iPad.
• I wiped it for them and they're on iOS 15 and logged in successfully.
• However, there is a message in settings telling us that iCloud is not correctly set up
• (they can access messages, FaceTime, their iCloud photo library on the iPad, so this isn't strictly true).
• When we go into this section, it asks us to:
  • Enter the current passcode
  • Then we are asked to enter the old passcode - which we don't know
  • There is a message at the bottom that says 'Forgot your passcode?'
  • On pressing this, we get an option to 'Reset Encrypted Data' or to cancel

The only way forward seems to be to 'Reset encypted data' - but does anyone know what this does and what happens when you do it?

Many thanks in advance.