The first is at the hardware level, performed by the SSD itself.[0] It encrypts all data on it with a key stored in rewriteable memory. By changing the key, you can "erase" the drive. The FBI could backup that key if they wanted to undo the "secure erase" feature.
However, this is not the only layer of encryption. The second is done in software, performed by iOS. It encrypts all user data with a key derived from the user's passcode and a unique key burned into the chip. The FBI cannot get past this layer, and this is what they wanted Apple's help for.
You were right in that the FBI could trivially get past the first layer of encryption, but it's not the one we care about. There's more than one layer.
[0] Or rather, by the flash controller. At least, I assume it is. It might actually be an iOS software feature too, but the OP's description reminds me very much of how some SSDs implement secure erase. Whether it's actually done in hardware or software is immaterial, anyway.