This is quite appalling, and part of me is starting to despair. As many of you pointed out already, many of us already tried this procedure and didn't get to anything. Or at least, we tried a variation thereof: I backed up to my Mac and did a complete restore, whereas this suggests backing up to iCloud. Whether that's because iCloud is generally more accessible, or because it may back up fewer things and provide a "cleaner" restore (see my post here).
However, I wonder if following this procedure to the letter, especially AFTER upgrading to 14.0.1 and 7.1, may work. Has anyone tried it?
I hate wasting time doing pointless things, but I'm stuck working all day anyway so it will make little difference if my phone is available or not. Setting up Apple Pay and my banking apps again is the part I'm the least looking forward to, to be honest.
I'm just concerned that, should this not work, Apple's only solution will be "restore as a new phone and watch".
It wouldn't be too bad for the watch as it's just watchfaces to recreate and little more (in fact I'm tempted to give it a go first), but restoring the phone from scratch would be a nightmare.