Hi PGarg,
Based on what you described, DESKTOP-1 appears to be an outdated Family Safety record left behind after Windows was reinstalled. Since only DESKTOP-2 appears when you check the child’s Microsoft account device list, there is no remaining device for you to remove manually from that page.
Please sign in with the child’s account at Microsoft account Devices once more and confirm that DESKTOP-1 is not listed. If it is already absent but still appears in both the Family Safety website and app, the remaining entry is likely on the Family Safety side rather than on the current Windows installation.
Unfortunately, Family Safety does not provide an organizer-facing remove option for this type of old device entry. In that situation, please contact Microsoft Support, select Get Help, and then Contact Support. Explain that the old PC no longer exists in the child’s Microsoft account device list but remains visible under the parent’s Family Safety view.
I would not recommend formatting the PC again, since DESKTOP-2 is already connected correctly and the issue appears to be limited to the old entry. Thank you so much for your understanding.
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