Reset in recovery mode but still ask for passcode

Hi all.. here's my story..

My daughter's iPad mini have just been recovered from the Police today (it was lost and kept by somebody who managed to use it for a while because there wasn't any passcode set on it initially).

I did set it to 'Lost Mode' while it was missing, and I didn't remember putting in any passcode when setting up the Lost mode on iCloud. I did remember putting my phone number and a short message to return the iPad if found.

When I finally managed to turn the iPad on, the passcode screen pops up. I am now stuck here as I didn't know or set any passcode before.

Apple's website suggested that I erased the iPad and remove it from my iCloud - which I did. (According to Apple, this should disable any previously set passcode and that anybody could reset / use the iPad as new.

Somehow it still ask for the passcode.

Apple's website further recommends to reset / update the iPad via Recovery Mode - which I did follow step by step but after successfully downloading and updating the software, once again it asked for passcode after the restart in order to complete the upgrade...

I am now clueless as to what to do. The only way I can think of right now is to ask the Police to go ask that person who took my iPad for the passcode (if any was set). Final option is to take it back to Apple.. and hope they have the solution to this problem.