Unable to Access Apple ID Due to Lost Device and 2FA

My daughter lost her iphone12 three years ago, and it was reported as lost. That device had Content & Privacy Restrictions enabled, with Passcode & Face ID and Accounts set to "Don't Allow."

Now, I’m giving her a hand-me-down iPhone XR. During setup, I was able to log in with her old Apple ID, but we encountered a Verification Failed error due to two-factor authentication. The registered number for 2FA is tied to the stolen device from three years ago.

I tried following online steps to update the phone number, but I keep running into the Content & Privacy passcode restriction which I also forgot the code since it's been years.

Has anyone experienced this before or can offer advice on how to resolve it? Any help would be greatly appreciated.