Erasing generates a new key for the data. I think it could be done without reformatting, but they still would have to read each block, decrypt with the old key, encrypt with the new, and write back the result. Testing the recovery procedure for that (how do you know where to restart that after it crashed?) would be a challenge, though.
As you point out, erasure can rotate keys. What Apple apparently didn't provide was a straightforward way for key rotation as a key management function. This surely appears to have been rushed to market.
Restore the data that you backed up in Step 1
Backup is step 2.
Or something like that. It's an admittedly implausible scenario, but good security is not based on "meh, it probably won't happen". Of course, a much more plausible scenario is password re-use.