Why does my Mac always want my password and disallowing Touch ID

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If you have problems with Touch ID

• If Touch ID doesn’t recognize your fingerprint: Make sure your finger is clean and dry, then try again. Moisture, lotions, cuts, or dry skin can affect fingerprint recognition. If Touch ID isn’t working on your Mac or Magic Keyboard, see this Apple Support article.
• If you still have to enter your password: For security, you need to enter your password when you start your Mac. Sometimes you need to enter your password to continue using Touch ID. For example, users must re-enter their password every 48 hours and after five incorrect fingerprint attempts.

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

Reset  SMC:   How to reset the SMC of your Mac - Apple Support   Choose the appropriate method

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Resetting the system management controller (SMC) can resolve certain issues related to power, battery, fans, and other features.

If the computer sleeps by closing the lid or manually sleeping it, the next time it wakes, Touch ID should be working.

If you power off the Mac, then power it back on or restart it, this is when Touch ID needs to be enabled by entering the admin password. Pay attention to the on-screen wording when it asks you for the password. It's something along the lines of "Your password is required to enable Touch ID". This is normal behavior if the Mac was powered off, then powered back on as well as when it it restarted. Its simply a security measure to verify the user's credentials before allowing Touch ID to be re-enabled after a shut-down or restart.

If the Mac is sleeping for longer than 48 hours, you will likely be prompted for your password to re-enable Touch ID.

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