Transition from iPhone 8 to Used iPhone10

My daughter has a broken iPhone 8 and I am going to let her have my wife's old iPhone 10. There is no SIM card in the iPhone 10, but it still recognizes the WIFI and is signed into my wife's Apple ID and iCloud account.

When I reset everything on the iPhone 10 (clear all Apps and Settings), will this also clear everything on my wife's new iPhone 12? How do I make sure all I am doing is clearing the old iPhone 10? As you can imagine, if I also end up zapping the iPhone 12, I might as well pack my bags and move out of the house!

Can anyone explain how to navigate this transition to me?

Many thanks.

Lost in Transition!