Using touch ID with iMac Retina 5K, 27-inch 2020

The keyboard may be compatible but Touch ID is not configurable with a 2020 iMac 27 inch. That iMac does not support Touch ID. See the following for specifications. iMacs that are configurable with Touch ID specify that in the Input section of the specs. iMac (Retina 5K, 27-inch, 2020) - Technical Specifications - Apple Support

Also I note that the Keyboard with Touch ID but without the Numeric Keypad correctly omits the 2020 iMac 27 inch in the Compatibility section so I suspect it may be an error in the listing for the one with the Numeric keypad. See: Magic Keyboard with Touch ID for Mac models with Apple silicon (USB-C) - US English - Apple

and

Magic Keyboard with Touch ID and Numeric Keypad for Mac models with Apple silicon (USB-C) - US English - White Keys - Apple

Both of those keyboards have product names that end with "for Mac models with Apple silicon." The iMac (Retina 5K, 27-inch, 2020) is not one of those.

The System Requirements section for the one with the numeric keypad says "Mac with Apple silicon using macOS 15.1 or later, but the Compatibility section lists several Intel-based Macs, all of which are Mac computers with the Apple T2 Security Chip - Apple Support. (The 2018 MacBook Pros are not listed as compatible with this keyboard even though they do have the T2 security chip.)

I suspect that whoever wrote the description for the keyboard with Touch ID and a keypad thought (incorrectly) that it supported Macs with Apple Silicon chips AND Macs with T2 security chips. (Those two types of Macs are similar to the the extent that both encrypt and decrypt the contents of their internal SSDs in real time.)