How to reset iPhone when Apple ID has been deactivated?

If you cannot reactivate the account yourself, cannot get Apple to help you with this, and cannot meet the requirements for a lock removal request, then all you can do is recycle the device. Perhaps you didn't deactivate the account but requested its deletion? There is a limited time window during which you can cancel the deletion request.

If you cannot get the device unlocked then read this section from the very bottom of Apple Trade In - Apple :

"Does Apple offer recycling?

Yes. Apple Trade In lets you recycle any Apple device (including devices from Apple-owned brands) at any Apple Store and on Apple for free. That includes your batteries and old electronic products as well as free, on-demand packaging recycling for our commercial, education, and institutional customers. When we receive your device, it will be thoroughly inspected to determine if components can be recycled or reused. Whether recycled or reused, all activities relating to the processing of your device will be managed in an environmentally responsible way."

You say you submitted proof of purchase, but what kind exactly? Apple won't accept a proof of purchase from a vendor who is not an official retailer. In fact they are not particularly specific in their Activation Lock documentation as to what exactly is required. Typically this would be a receipt made out to you from a sale made by Apple itself or an authorized retailer. The status of the actual account is not relevant in an activation lock situation. You could still have a stolen device even if the account had been deleted.

All this came about because iPhone became very popular items for thieves to steal. It has the downside, though, that sometimes it can have negative effects upon owners. You have to start treating electronics documentation the way you would for a car.

Sorry, it sounded like you had already done it which meant you must have seen the page. Activation Lock support request - https://al-support.apple.com/#/additional-support Apple says, "Proof of ownership documentation is required," but does not detail what currently constitutes proof. Apple may typically require the original receipt* issued by Apple or an Apple Authorized Reseller. If Apple resets the device this will give you access to the device but won't restore access to the account used to lock it. There is nothing that can be done to expedite an Activation Lock request.

*Apple recommends you "Keep your receipt after you buy an Apple device" --> Keep your receipt after you buy an Apple device - Apple Support

Re: “… one person [on Redit] managed to get it reinstated … “

One anonymous poster who might not have the faintest clue as to what they are talking about … or hedge on facts … or are outright lying because they enjoy “pot stirring.”

Apple clearly states in writing up-front that AppleID deletion is permanent and irreversible.

Who are you going to believe ???

Apple is also are VERY clear about the technical necessity to sign-out of ALL devices before the AppleID deletion becomes effective; AND the consequences if one fails to do so.

Sorry ….

Just because they may be a large retailer does not necessarily mean they are authorized. You can buy an iPhone in almost every country in the world, but some of those countries have no authorized retailers.

We are getting too much into broad generalities here. Remember that the people on this forum are users like yourself. I can use resources you provide to try to provide information but we can't do anything more about this than you can, sorry.