"There is a problem with your iPhone." Activation error message?

Hello. I have an iPhone 7 that I've been using for over a year now. I recently upgraded and was planning on giving this phone to my younger brother (he's still got a 4s and he's been needing an upgrade for a while now). I deleted my iCloud account from it and did a reset. After resetting it and going through the setup, I was meant with the following error:

"There is a problem with your iPhone. The iPhone cannot be activated for service. Please contact your carrier or AppleCare."

I've done my fair share of iPhone setups, but not once have I ever seen this. Upon doing a quick search on the internet, I've seen some people say things like "it's lost or stolen" or "iCloud locked". For one, I got this from my local Apple store brand new so that can't be the case. Two, I literally just removed all my account info so it can't be iCloud locked either.

I took it to that very same Apple store the next day where a genius tried to help me out. I told him that I am the original owner and removed my Apple ID. No such luck. Best info I got from him was to go to my carrier and see if they can help me. So on the way back to my house I stopped at an AT&T (my phone carrier) but to no avail.

Now what do I do? I don't see anyway I can input my Apple ID in case I did for whatever reason fail to it. Could it be a hardware issue? It was working fine prior to the reset.

I took a photo of the phone so you can see the error. Don't really know if that will help or not.

Any help would be greatly appreciated.