FixmePlzz I'm trying my hardest not to blame grapheneos for this... but I still love grapheneos, It's like a toxic dance...
Unfortunately these days phones are made out of hardware, and unfortunately these days hardware breaks. Screens can turn pink or start displaying green lines, touchscreen sensors can fail, CPUs can fail, GPUs can fail, DRAM can fail, flash storage can fail... and also fingerprint sensors. Sometimes the problem is something as simple as a loose cable from the fingerprint sensor to the motherboard.
Here is a randomly-selected Reddit thread about fingerprint-sensor problems: https://www.reddit.com/r/GooglePixel/comments/1bn3r4n/fingerprint_unlock_no_longer_an_option_on_my/ I see no hint that these people are running GrapheneOS.
At this point I'm as confident as I can be that you are experiencing a hardware problem with your fingerprint sensor. I am also fairly confident that the device needs a trip to a repair shop (unless you decide to junk it, which personally I wouldn't recommend at this point).