I discovered the exact condition that is leading to the 2FA PIN prompt not appearing after fingerprint unlock in some cases.
I confirmed this is repeatable everytime on my device, even after a reboot. I saved a system log which I can share if it's helpful.
Setting required to reproduce:
Always Show Time and Info - toggled on
Confirmed to happen with the following optional settings:
Powerbutton is set to lock immediately, and I confirmed this still happens whether I have a post-display timeout buffer of 5 seconds set, or no buffer (locks as soon as display turns off to the always-on clock) - makes no difference.
So, the exact state is this:
Once the device is locked, either by screen timeout or powerbutton, the screen transitions to the always-on-display with a clock, but no fingerprint icon, nor shortcuts (if enabled).
When in this state, unlock with fingerprint will not trigger 2FA on my Pixel 7.
However, if the screen is first "awoken" out of the always-on-display, such that the screen brightens, the fingerprint icon appears, and shortcuts (if enabled) appear, then 2FA will work correctly.
Hopefully someone can try this on their device to confirm of its isolated to just mine or not.
Thanks