Ok so I tried this advice and ended up stuck in a repeating loop where I couldn't get into the phone at all. I had to return the phone and get another one.
The other one arrived today and the same thing is happening with the Software Update - it's been over 2 hours. It won't let me set up the phone without installing iOS 26, but it doesn't seem able to install it.
Has ANYONE with a refurbished iPhone SE 2nd gen successfully gotten through this process? I am feeling close to despair here. (Oh and I can't use my old phone while this is going on because this is part of the process where it's replicating everything from my old phone and it's just waiting for the Software Update to finish; can't use any other apps while this is happening).