Seems to affect a lot of users... Caveat YMMV but I’ve observed over the past couple of days that if I do nothing, after waking my M1 Air, the external monitor comes on reasonably quickly with the password dialogue. Only then do I give Touch ID the one finger salute. This saves the occasional bit of a song and dance for me (e.g. Turning off, flickering, turning green and so on). It seems to be only when I wake the MacBook and use Touch ID immediately that I have problems.