So there isn’t a really obvious set of what factory settings are since those change over time as far as default bundles go. If you want something close to minimal for running on hardware, you can remove all the bundles aside from os-core, os-core-plus, os-core-update, whatever kernel-* bundle you want to use, hardware-uefi, bootloader, linux-firmware, syslinux, os-core-webproxy, libglib, p11-kit, libstdcpp and findutils. It might be that depending on your kernel there are some other bundles that you can’t remove but otherwise that should be about the right list. From there, rm -fr /etc/* /home/* /opt/* /var/* /usr/local/* and reboot and that should be pretty much a factory reset. After that I recommend a swupd repair --picky just in case your system had some modifications in places swupd manages.
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