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But you can just remove that restriction after you’ve unlocked the iphone? Granted, it’s quite hidden, so nobody might find it.

You can only remove it with the separate password used for Screen Time, you can't use the regular password to remove it.

You can simply reset the password with your Apple ID credentials

Yes, but crucially that's different from your iPhone passcode and the thieves don't have access to it, foiling the attack under discussion.

It suggests that one can use the unlocked stolen device to learn the appleID.

Then follow a series of steps on the device to turn off the screen time passcode by entering the appleID and the device passcode.

Namely "forgot passcode", "enter appleID", "forgot (appleID) password", "enter device passcode".

If correct, then the use of a screen time password can not defeat this attack.

No, as far as I know the screen time specific code is required to unlock any screen time restrictions.