Answer
Wa `alaykum as-Salamu wa Rahmatullahi wa Barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
1- The verse you mentioned does not mean that a person who repents from sins is equal to the one who avoids sins. 2- Rather, it is an expression of Allah’s favor upon those who repent and return to Him.
Answering your question, Dr. Muhammad Salama, PhD in Islamic Studies in English, Associate Professor at the Faculty of Islamic Sciences al-Madinah International University (Mediu) states:
The Qura’nic verse reads, “…except for whoever repents, and believes, and does righteous deeds. For [the likes of] them, then, God will substitute their misdeeds with good deeds. And ever is God all-forgiving, mercy-giving.” (Al-Furqan 25:70)
This substitution is a grace from Allah Almighty upon those who sincerely repent to Him. When repenting sincerely, one wishes that he/she never committed that sin and the recollection of such evil deeds makes him/her feel more meek, submissive, humble and humiliated before Allah.
Allah Almighty loves a person to have such feelings that bring him/her closer to Him. Sometimes those who apparently do righteous deeds do not have such feelings and even feel proud of themselves.
One who has spent his/her life avoiding haram and doing righteous deeds will have his/her reward in full from Allah and will never be wronged or diminished. In fact, this person was favored and guided by Allah Almighty to lead this righteous life, which was a great favor and grace granted to him/her in an early period of his/her life.
The one who repents sincerely after spending part of his/her life in committing sins will have his/her misdeeds replaced with good deeds as a favor granted from Allah for their sincere repentance; but this favor is granted in a later period of his life.
Indeed, “That is the bounty of Allah. He gives it to whomever He so wills. For Allah [alone] is the Possessor of Magnificent Bounty.” (Al-Hadid 57:21)
Allah Almighty knows best.