"Unlock with Touch ID" is grayed out

It could be that there are problems with your Touch ID sensor

Please try this

1. Make sure that you have the latest version of macOS.
2. Make sure that your fingers and the Touch ID sensor are clean and dry.* Use a clean, lint-free cloth to wipe off any dirt or debris on the Touch ID sensor.
3. Your finger should cover the Touch ID sensor completely. While Touch ID is scanning, you shouldn't tap too quickly or move your finger around.
4. Choose Apple menu  > System Settings (or System Preferences), click Users & Groups, then click the lock  to make changes. Click Login Options, then make sure that Automatic login is off.
5. Choose Apple menu  > System Settings (or System Preferences), click Touch ID & Password, then turn on the setting to use Touch ID to unlock your Mac.
6. Try to add a different fingerprint. Choose Apple menu  > System Settings (Or System Preferences), click Touch ID & Password, then click Add Fingerprint.
7. For Magic Keyboard with Touch ID, turn your keyboard off and on, then connect your keyboard to your Mac with the USB to Lightning cable. After you turn Magic Keyboard off then on, Touch ID may be unavailable for up to 10 seconds.
8. Restart your Mac.