What happens in the scenario of a consumer having an old iOS device sitting around, they forget the passcode, but now can't reset it using iTunes?
So in order to un-brick an old device sitting around, you put it into DFU mode (the key combination varies from device to device) and restore it that way.
Of course you don't ever get your data back, but that's totally the expected behaviour.
I have always thought (though without any source) that they re-flashed the iPhone by putting it into the DFU mode (and tricking the iPhone bootloader into accepting their key) and then just brute force the key.
To answer your scenario though, you can always reboot a "locked-down" iPhone into Recovery mode or DFU mode and wipe the device without being able to recover the data.