removing encrypted drive / password required to 'unlock' disk

I bought a MacBook Air (2017 13 inch Intel Core 95) for my daughter when she went to uni.

She has just bought a new Macbook and returned the old one to me for my use (not sure if I should be happy to be inheriting a computer I originally bought her :-)

It looks like she has reset the computer before giving it to me.

I copied my files from my iMac using TimeMachine (this was successful though, apparently, some files weren't copy because of privilege errors) though I had to exclude some folders because the Macbook HD isn't large enough.

However, when I log into the account, there is a 'enter a password to unlock the disk' dialogue box. I don't think she can remember the password :-(

When I had a look in disk utility, it looks like there are 2 encrypted APFS volumes on the HD. I presume it is these drives that are causing the dialogue box.

I need to remove the encrypted volumes because 'the volumes in Container' is 39.44GB which leaves only 10GB of free space on the drive

I have read the support page for cleaning the Macbook.

When I start the Macbook in to recovery assistant, it is showing two drives - the 'Macintosh HD Data' (which is the volume marked encrypted in disk utility) and the Macintosh HD. If I 'erase' the volume marked 'Data' will that return the 40Gb and remove the 'enter password to unlock drive' dialogue?

Do I have to reset the MacBook back to factory settings?

All answers greatly appreciated