My iPhone was stolen today. I had not put a passcode on the device.
If the device is reset from the Settings, will I be notified?
The device was running iOS 7.0.4. Lost mode was activated and the device is now offline.
The device can't be removed from Find my iPhone by resetting it. Furthermore, you can and probably should set the device to lost mode if you want to put a PIN on it and lock the device with a helpful message to contact you for the eventual return of the device. If you really just want the device wiped, then you can erase it, knowing that still it will show your lost message:
With iOS 7, Find My iPhone can continue to display your custom message, even after your device has been erased.
When you press the Reset button in Settings, it asks for your Apple ID, and will only reset the device when it's been entered.
Attempting to turn off Find my iPhone through iCloud settings will prompt for your Apple ID.
If the device is factory reset when powered off through iTunes, it will still require activation using your Apple ID.
Putting the device in lost mode is probably better since eventually the thief will decide to return it once they realize whomever they sell or give it to will keep getting reminded that the device was lost and should be returned to you.
The find my iPhone app will let you know when the device has been removed from your device list. However, if your phone has been stolen and reset without a password by:
Reset the iPhone by holding the sleep/wake button at the top right of the device and the home button at the bottom center of the face at the same time.
Hold them both until you see the screen go black.
Wait until the white Apple logo appears.
You are most likely not going to find your phone. So the thief is thus not entitled to returning the phone to its owner. This is a flaw for the device.