Activation Lock Issue on Apple Silicon Device After MDM Profile Removal

Hello Mac Community,

I hope you're all doing well. I'm facing an issue with one of our office devices and seeking some advice or guidance from the community.

Background:

We manage our office devices through an Apple Business Account. Recently, we needed to transfer a specific device from one employee to another. The previous employee left the organization, and their personal iCloud account had previously been added to the device. Before handing it over to the new user, we removed the previous iCloud account and replaced it with our company's official Apple ID.

The Problem:

After the MDM profile removal, the device automatically rebooted and ended up on the recovery screen. It's now asking for an activation lock. However, here's the tricky part - it's not asking for the Apple ID we last used (our official Apple ID). Instead, it's asking for the iCloud account and password of the previous employee who was using it.

Device Details:

The device in question is an Apple Silicon device. MacOS ventura was installed

Now how can I reinstall or reset this Mac?

Thanks in advance