Setting up and managing device configurations using Intune
It doesn't matter which option you select, the end result in your case should still be the same. I think the problem you are having has something to do how the Windows OS was deployed there in the first place. Maybe the "image" you used or your manufacturor has deployed differs from the original method.
You could do a test - grap Microsft Windows creation tool from MS site, start the USB installation media wizard and let it create the Windows OS installation media for you in the right way. Then install a computer as new, remember to delete all existing partitions during the install wizard and join the computer to Intune with autopilot or manually. After the computer is applied correctly in Intune, do the wipe. I bet your Windows reset process will go the right way and you will end up in OOBE :)