Does Find My iPhone send a notification when being reset?
When you send a remote erase, it's as if the device is new out of the box. The welcome screen is presented to the user.

If the device is activation locked, it will still be locked. If it's not locked, the person in possession of the device can set it up as they choose.

No record of the event is stored - so they may be able to assume you wiped it. If there was a passcode lock and they were guessing, it's not possible for them to know if they caused the erase or you did in all likelihood. If they didn't touch it, they could conclude it was buggy (unlikely) or wiped (likely).