That I've done a factory reset by selecting the options from the Kobo menu, as well as doing so with the pin.
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Did the device respond when not connected to the PC after the factory reset and before any setup was done?
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It responds at all times if plugged in or connected to Wifi, so yes. Any set up can be chosen.
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I would suggest doing the setup using the PC and Kobo desktop application
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I wasn't able to locate the files you referred to.
Here's a screenshot of the directory:
I've just done another reset. No change.