"Ming-Chi Kuo Predicts iPhone 8 Will Omit Touch ID Entirely"
That's a click-bait headline. At no time did Ming-Chi Kuo state that. He only said TouchID would not be embedded in the screen.
While I agree that it was a misleading (potentially click-bait) headline, I think the author was making a supposition based on the available facts, which is that Kuo said there will be no Touch ID on the display while previous rumors of Touch ID on the back or power button have been previous debunked. Therefore, it must be that there is no Touch ID and Apple will use something else to unlock the phone.
Having said that, the author should have made it very clear that this was, in fact, a supposition. But then the author could also very well point to the name of this blog "macrumors" by saying it was only a rumor. You're right that none of what Kuo said presupposes a lack of Touch ID, but the facts are not in favor of it.
My own take is that Apple will find a way to include Touch ID or risk having large swaths of potential buyers leave in droves for either iPhone 7s (with its lower margins) or something else. Touch ID has become such a useful and popular feature that they would be foolish not to include it.