An iPhone 6 Plus' Touch ID stopped working and the user couldn't remember the passcode and, after many failed attempts, was forced to choose between setting up as a new iPhone or restoring from backup.
The iPhone 6 Plus was frequently backed up by iCloud and never backed up by iTunes.
Directly (from the initial setup) or indirectly (once setup as a new iPhone), attempting to restore from iCloud prompted for and accepted Apple ID authentication (username, password, and phone number-based TFA) then prompted as follows and rejected all given:
Enter Old Passcode
Passwords, home and other data are protected by the passcode
previously used to unlock this iPhone.Your passcode is encrypted and cannot be read by Apple.
I wasn't able to find anything online regarding this scenario, hence this post.
Best Answer
I contacted Apple's technical support who said:
Personally, I have restored from iCloud and I was never prompted for my passcode so I guessed that it was prompting from a verification point-of-view, rather than an encryption point-of-view.
On an iPad, I enabled iCloud and signed in using the same Apple ID.
On the iPhone, restoring from iCloud prompted for a verification code from the iPad and succeeded.
Apple's technical support said: