iOS was supposed to prevent phone theft by making phones brickable through iCloud.

Now, phone thieves just ask you at knifepoint or gunpoint to log out of iCloud

Unfortunately that's your own misunderstanding. iOS (as well as modern android) quite effectively prevent phone theft while the electronics are in transit along the last mile of the supply chain. Anything beyond that is a happy accident.

(I'm being a bit overly cynical there but IMO only the tiniest bit.)