Canon PowerShot is the way. I grew up on those. It's the perfect type of camera for letting kids/teenagers figure out how photography works as they grow up.
I've taken pictures with a 7MP 1/1.8" sensor PowerShot that look so good the prints still hang in several family members' houses. And not because they are photos of people, I'm talking macros and underwater photography (the latter with an original Canon waterproof case and a DIY-contraption with an optically slaved 1970s Nikonos flash).
If you put the work in and ignored the DSLR crowd, those cameras were fantastic. I had a full tilt LCD screen in 2005. That feature is completely standard today, but it took the DSLRs a full decade to catch up. On the later models you got 20x, even 40x optical zoom with decent apertures.
With CHDK we had global electronic shutter working down to 1/30,000 of a second. We wrote code than ran on our cameras to do motion detection for stuff like lightning photography. We scripted timelapses with exposure control that factored in sunset timings. We scripted focus and exposure bracketing for HDR and infinite DoF. That was twenty years ago, on an undocumented 32-bit architecture that people painstakingly reverse engineered.
The only thing we could never get was bokeh on the telephoto end. Optics is a harsh mistress.
The Panasonic 20/1.7 is an amazing little lens but its autofocus is absolutely horrible. I used to carry it and an E-M5 (the first one) and the shots were great but AF was near useless.
Or, if it needs to be a zoomable lens, I'd look for some used (but well maintained) Digital Ixus or PowerShot.
With either of these they can learn much more about photography than with a toy camera.