touch id login option no longer presented. control panel grayed out on MacOS 12.3.

Q - " Standard user account on M1 iMac MacOS 12.3.Touch ID capable wireless keyboard."

A - Use Touch ID on Mac

Use Touch ID to unlock your Mac, log in, or switch users

To use Touch ID for these tasks, you must have logged in to your Mac already by entering your password.

• Unlock your Mac and some password-protected items: When you wake your Mac from sleep, or open a password-protected item, just place your finger on Touch ID when asked.
• Log in from the login window: Click your name in the login window, then place your finger on Touch ID.
• Only user accounts that have passwords can be unlocked with Touch ID. Sharing-only users and guest users cannot use Touch ID.
• Switch users: Click the fast user switching menu  in the menu bar, choose a different user, then place your finger on Touch ID.
• To use Touch ID to switch to another user, you need to have set up fast user switching, and the user you switch to must have logged in to the Mac already by entering a password.

Set up users, guests, and groups on Mac

If the Administrator of this computer has restricted access to the Standard User Account - one may need to speak to the Admin User

I don't know what you did to post the report, but it came out with weird formatting that makes it harder to read.

Please click Share Report->Copy Report and then just paste in the additional text box here in a reply.

This is a BIG problem that you should address IMMEDIATELY:

Low disk space - This machine is running critically low on free hard drive space.