I thought Activation Lock was iOS 7 and something newer was incorporated in iOS 8. Maybe they are the same thing, but it's basically the ability to render a iPhone inoperable if lost/stolen.
I went to buy a used iPhone 5s, saw it was not configured with an iCloud account (empty field where the email address would be), we did an erase contents to wipe the phone and I thought I was good, so I paid for it and brought it home. It's for my daughter who has an old iPhone 4.
The previous owner used it on Verizon, but I am AT&T, and since the 5s does both, I tried activating it online through my account at AT&T wireless site. It said there was a problem with the IMEI and to call. I tried putting my SIM card into the 5s and it worked fine. I could call and use the LTE data. I reset the 5s again, and configured it for my daughters Apple ID and restored the phone from her iCloud backup. That's when I checked the Activation Lock was ON for the 5s. I checked my iPhone 6 serial number on the same site, and it says Activation Lock is OFF, but I have Find My iPhone turned on. That's what is confusing. One phone shows on and one shows off, but both have Find My iPhone turned on.
In any case, I researched trimming a micro sim down to a nano sim and did that using the iPhone 4 SIM, and popped it in. Works like a champ. Find my iPhone using my daughters Apple ID locates the phone fine, and doesn't say it's locked (which, of course, it isn't since it's working).
So, I'm just making sure that
somehow a previous owner hasn't claimed the phone lost/stolen and maybe Verizon has initiated the Activation Lock status to ON? To be honest, I don't recall seeing the phone go through the activation screens when I set it up with my daughters account on AT&T.
I'm afraid to update to iOS 8.x (it's still on 7) if iOS 8 has something that can lock the phone and render it useless, considering the Activation Lock status says ON.
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Here's an article concerning the kill switch feature in iOS 8. Lots of other article if you search the internet for "iPhone Kill Switch".