I can't delete iCloud account from the phone because it prompts you to enter an id that is associated with a wrong default hotmail Apple ID account. Can't retrieve old hotmail Apple Id account because it doesn't exist anymore rightly so.
ICloud – iPhone 6s iCloud defaults to old Apple ID. Can’t delete iCloud account because it says Apple ID is wrong
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Best Answer
The ID still exists, & in fact cannot be deleted - Apple apparently keep them 'forever'.
What you can do is change the primary email address attached to the ID - the ID itself doesn't need to be a valid email address, it's merely a sensible starting point.
Ref: Apple KB - Change your Apple ID