Chosen Solution
So I changed the screen on this iPhone and moved the home button in order to for touch ID to work. I remember initially doing this a while ago to the same phone and touch ID did indeed work. But now all of sudden I cant use Touch ID on this iPhone. The original home button is not damaged either, because I still have the original cracked screen and swapped it back to test to see if the home button is damaged. Surely enough, Touch ID worked on the cracked screen. Any suggestions on what to do?
Well firstly I am assuming you mean Touch ID instead of Face ID. But it seems as if you have a faulty screen and the Home Button Flex with Touch ID connects through a flex built into the screen. I have certainly had faulty ones of these myself so you are looking at a new screen.
