Difference between “Remove Device” and “Erase Device” in Lost Mode for a stolen iPhone 13

Erase device will wipe the data from the phone but it will remain activation locked and unusable to the thief.

Remove device will remove it from find my entirely, making it usable by whoever has it.

Do not remove it unless it's your intention to gift your fully working phone to the thief.

If you were using a strong passcode, the data is encrypted and unreadable.

That said, the odds of you ever recovering that phone are virtually zero.

I would erase it. You won't be able to track it after doing so, but it will remain activation locked and unusable.

ilovemyteddy wrote:

will we still be able to track the phone in that case?

If your iPhone or iPad was stolen - Apple Support

• "If your device has iOS 15 or later, or iPadOS 15 or later, you can still use Find My or iCloud.com/find to locate it after you erase it."

That said, just because it might be theoretically possible to track the phone doesn't mean that your odds of seeing a location are good – or that it would be a good idea to go to confront the criminals in person. You might lose a lot more than just a phone.