iTunes requesting password to create the very first iPhone backup
The encrypted backup password is stored on the device itself, not in iTunes.  This indicates that you have used a different iTunes previously to make an encrypted backup. 

If you don’t know the encrypted backup password that is stored on the device, the only option is to enter Settings on the phone and ‘Reset all Settings’ which will preserve user data, but restore all settings to default.

See this Apple support article.  (Password reset info in the last section.)