MacBook Air Touch ID didn't work

Try Reset SMC from this Link.

If that does not work, suggest restarting in Safe Mode ( Shift ) key immediately at startup. It will do a Repair Disk, clear cache files and only load Apple Software to load the OS - so it is going to take longer to boot up - Normal. Once Logged in, go System Preferences >> Touch ID and remove any existing Finger Prints. Now add back and restart computer in normal mode.

I have the same issue. I have gone through the documentation. But I am unable to login with my device password. After Mac OS Big Sur 11.1 update. It is not allowing me to go to next steps even if I pass the correct device password. (Happens with Safari, System Preferences etc.)

See if this helps;

https://support.apple.com/guide/mac-help/touch-id-mchl16fbf90a/mac

That is great and most important the machine is back to normal usage.

Do come back to these forums if more issue arise or just to participate in helping others