How to restore an iPhone 7 despite lack of storage?

Hi everyone, I have a somewhat complicated and specific question regarding restoring an old iPhone 7s. The mother of one of my friends has an old iPhone 7 that is still in very good visual condition. She wanted to have it restored because, as I understand it, she forgot her passcode years ago and thus locked the phone. I tried connecting the phone to my MacBook in the usual way and then restoring the phone via iTunes. This seemed to work well at first, until I received an error message stating that I needed to update the phone first. This requires 5 GB of free storage space, which the phone does not have. Since I have no access to the phone, I cannot expand the storage space or delete data to create more space. This means I can't update the phone and can't restore it without the update. This really puts me in a dilemma. On top of that, the phone has been in restore mode ever since, and no key combination can get me out of it; I've already searched through everything I can find on the internet about this.

My question is, does anyone have any idea how to restore the phone? Transferring data isn't a problem; you can delete everything and restore the phone from scratch. I would just be very grateful for another method, either to free up space for the update or to restore the phone without the update.

Thank you in advance to anyone who takes the time to help here.

Best regards!