My wife has an iPhone 6 and I have my MP3 music on an old second generation iPod Touch (stuck on iOS 4.x) - I'd like to upgrade her to an iPhone 8 (we use Verizon), and then use her old phone as my 'new' glorified iPod Touch (plus she has 4X the storage, so I could add a LOT more music!) - however, after reading several 'google hits' on the topic, including
HERE, I'm still somewhat confused, i.e. several of the references state that the phone needs to be plugged into a computer and activated w/ a SIM card in the device (some confusion whether the card needs to come from the cellular service used previously) - also, I would want to pretty much restore her old phone to factory settings w/ a newly installed iOS as if I were going to sell the device.
Thus, my plan would be to sign the phone out of iCloud, disable 'Find my phone', erase all contents - then activate the phone attached to iTunes w/ a SIM card in place - questions then would be: 1) Do I need a Verizon card; and 2) Does the card need to left in the now converted phone -> iPod to avoid generating the message discussed by the OP? Thanks for any comments - Dave