Apple Business Manager claimed back Apple IDs under our domain, now unable to pass activation lock on Macbook Air

It is quite a story, so i will keep it brief and to the point.

I recently setup an ABM account and configured it to claim back Apple IDs previously created using work email addresses. Now these Apple IDs have been claimed back, however, I now have a fairly new Macbook Air M1 on which the previous owner enabled activation lock for some reason and subsequently forget their password thus using the old password to bypass the lock is sadly not an option.

The Apple ID was removed when it was claimed back. I recreated the account under the same credentials yet am unable to use its new login credentials to bypass the activation lock.

These device is also not listed under devices owned by the account in the account manager.

So unless I am missing something this seems like an issue only Apple is able to fix on their end by un-linking this device from this removed account. Does anyone have any ideas, feedback or suggestions?