Following is from an iPadâŚ

The password is the first input field, and is required.
Verifying of the passwordâre-entering the same passwordâis the second field, and is required.
The third field is the password hint field and is a message to yourself about the password chosen; a hint or suggestion or reminder to help you with a forgotten password, and is optional.
The Face ID switch allows Face ID to be used to access the note, though (see below) the password remains required.
If this abovementioned info on the fields and if that above screenshot does not answer thisâŚ
Please post a screenshot of what you are seeingâŚ
Restart the iPhone, and see if it works better.
Failing that, update to iOS 15.0.1, and try again.
And more generally⌠The data in the note is encrypted with the password. Forget that password, and if the hint was entered but was not helpful or if there was no hint entered, then the data cannot be decrypted. Touch ID does not replace remembering the encryption key; the password to the note. We see far too many postings from folks that used Touch ID for a while, and had forgot the password. Which works great, right up until Touch ID requires you to re-enter the decryption key; the note password.