Fingerprint lost phone unlocking ability – where to troubleshoot?
The problem was that in Knox Workspace, fingerprint reader got disabled by an event similar to a device security policy change which are issued by Knox Workspace administrator. This in turn disabled fingerprint unlock for the entire phone.

The solution was to detach Knox Workspace unlock procedure from phone unlock procedure by switching off the setting Settings > Work Profile > Use one Lock and by removal and re-adding fingerprints. Then the reader became available again for unlocking the phone although it is no more available for unlocking Knox Workspace.