IOS 8.1 thumb security does not work

This has always been the case.

 

Different question, but does anyone know why? The only reason I can think of is that it would help people to remember that password. But that seems silly. So why do they do that? What purpose does it serve? I fail to see how forcing me to manually log in is more secure.

 

Apple requires entering a passcode to unlock the phone after a reboot because the iPhone keeps the Touch ID decryption keys in memory rather than in storage.

Any reset flushes out the memory, and the keys also get purged after 48 hours of non-use or 5 incorrect Touch ID entry attempts. Among other things, it prevents someone from accessing your data by moving the motherboard to another device

So Yes, it is by design. If you restart your phone you have to enter your passcode.