I faced the same problem on my iPhone 11 Pro Max a few days ago. I had dropped it hard onto a puddle. It said the same thing for me and I thought that was it. I was preparing myself to live with having to input my password all the time because when I checked, repairing the FaceID module would come to about $399 which I definitely can't afford. I tried restarting it a few times like it suggested but to no avail. 5 days back my phone had run out of battery and once it turned on after charging it – it worked!
The TrueDepth system uses lasers that might harm our eyes and skin if there's anything that is wrong with it, so my assumption is that Apple disables it as soon as they detect even the slightest of oddities in the system. Maybe the shockwave could have done something or the water from the puddle, if your FaceID is not permanently damaged it might begin to work again like it did for mine.
I'd suggest you to maybe give it a few more days and dry it using silica gel if water was involved in the accident. Then wait till your funs out of battery and then put it for charge after awhile (mine was out of charge for about 3 hours before I put it back for charge). Hopefully this would work out, if it doesn't then try to reset or update your phone software. If nothing works then I think your TrueDepth camera system is damaged in someway that permanently compromises the system.
