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Great - it did work for me! Thanks for posting!
I think timing is everything. You have to hold the "Volume +" button until you see the reset message. After that, my unit switched back to its original state, with Kobo account setup screen.
So it looks like we do have now the "full factory reset" route, in case the unit is bricked. I'd still keep an image of the internal card just in case (e.g., card can fail; or the device wouldn't even do the recovery).
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