Will lost iPhone 7 plus still ask for passcode if I erase it using iCloud Find my iPhone?

My iPhone 7 plus was stolen a week ago, and I had Find my iPhone turned on. I used it to put an activation lock on the phone, and so far it appears that only once has the phone been turned on.

I have been advised by the local police here (Sierra Leone) to remove the device from iCloud so that the phone can be used. Their fear is that if the thief or thieves find that the phone can't be used they will dismantle it and try to sell the parts and I'll never recover it. They have assured me that if the phone is made usable they can trace it through the IMEI number.

So should I erase the phone first then remove it from the iCloud account? Will it still ask for my passcode when it is turned on after it has been erased?

Thanks for your assistance.