Or through large inflation that devalues existing debt

Debt forgiveness can help reduce inequality, but so can holding people to their debt obligations. And either can also increase inequality. It entirely depends on the circumstances surrounding the debt.

It is true that many historical cultures have had a traditiom of periodic or irregular debt forgiveness. I think it is far less clear that the effect of such traditions was to constrain inequalities of wealth or income, or even that, lacking the ability for a narrow elite to organize extractive systems at the scale possible in the modern world, historical societies even had anything meaningfully comparable to modern problems in that domain to address.

There wasn't much economic growth at the time so paying interest was pretty much a literal debt trap. Forgiving debts definitively helped with poverty back then.