I was able to erase FileVault encrypted drive
As you discovered, you can indeed erase a FileVault-encrypted disk even without the password.

The "Unlock" option is under the File menu when booted in Recovery. Be sure to select the volume first for the option to become available.

If all else fails I use the following to erase a FileVault disk and start over:

diskutil cs list


Get the UUID of the Logical Volume Group for the next command:

diskutil cs delete &lt;UUID of Logical Volume Group&gt;