I recently had the same issue all at once on my 12 Pro, XR and iPad Pro 11. Mine didn’t start until it updated to 16.5, but I fought for several hours, including several days of calls to Apple with no help. They even sent it to their engineers, but they couldn’t help either. I reset the Face ID on my 12 Pro, which only made things worse. It wouldn’t let me even start the setup. It took a while, but I figured out that if I took my glasses off, it would start the setup. So I lowered my glasses to get it started, then quickly put them back on to finish the setup. But I still had the same issue as before.
I finally figured it out what it was myself. I don’t know when they added it, but under setting, go to Face ID & Passcodes, there’s a setting with a toggle labeled “Require Attention For Face ID. And apparently during the new update, it made it more sensitive and caused my glasses to interfere. I could remove my glasses and it would work fine.
So, I turned that setting off, and all three devices worked great with my glasses on.
What really ****** me off, is every time I talked to tech support, they couldn’t figure it out. After I did, I called to let them know, and asked if there was any mention of this increase in sensitivity was listed in their update, and was told it wasn’t. But I know for a fact that it was because all three devices did the same thing, the very same day that I did tge update