This is an "Apple" issue
I don't think there is anything wrong with the touch ID or the OS update, its just Apple being silly about security rather than being clever.
Since I got an iPad Air 2, I found touch is annoying. If you don't log in for 48 hours then you have to use a password. Let the battery shut down, you have to use a password. Frequent purchases through the App store never work just with touch.
If Apple wants touch to be a security feature then all these exceptions are not making it a safer device to use, its just an annoyance. Half the time now I just put in my pin and not use touch simply because I am tired of all the exceptions to when touch won't work simply because Apple won't support Touch ID in a wide variety of situations.
Apple either needs to make touch rock solid and not require all these rules and exceptions, or just remove the feature from future iDevices.
It's one thing to be innovative, but when the feature simply does not work because of imposed restrictions and exceptions then the innovation becomes a contrivance.