I’m experiencing the same issue.
Lenovo ThinkBook 16P - G5 model—it has a fingerprint sensor on the power button.
I’m a Windows Insider subscriber.
Everything was working fine before the Windows 11 Pro 26H2 update.
When I pressed the power button while the computer was off, it recognized my fingerprint and the computer booted up without any issues.
After the 26H2 update,
when I press the power button, the fingerprint sensor doesn’t work and the desktop doesn’t appear. I unlock the screen with a PIN.
If the computer goes into sleep mode while it’s on,
or if I restart it without shutting it down first,
the fingerprint sensor works on the lock screen and my desktop appears.
The problem is this: when the computer is turned on for the first time, it won’t boot using the fingerprint sensor on the power button.
The fingerprint sensor works later on. This is an issue during the initial startup.
I deleted the fingerprints and re-registered them. It didn’t fix the problem.
I reinstalled the system using the 26H2 ISO, but it didn’t fix the problem.
There’s no driver update available on the Lenovo support page either.