Looks like Luna can do this and works with older equipment. I almost spent ~$600 on a 2014 mini this past weekend on eBay. Luna is $80, I don't have an iPad currently, I'm still waiting to find a good deal on one.
Correct me if I'm wrong but the discussion so far doesn't mention TouchID. Isn't TouchID considered part of the TouchBar? I'm not a developer or someone with regular workflows. I almost never use the function sections of TouchBar but I love having TouchID available. I wonder if Apple is considering including a similar capability such as FaceID in future laptops and desktops.
Or perhaps Apple will enable the use of the iPad TouchID in Sidecar.
I actually thought this feature had been dropped since it stopped working on my MBP14" (M1 Pro) with iPad Pro 12.9 6G (M2).... but then after fiddling around and trying troubleshooting in Apple Support to deliberately move apps to the iPad it magically worked... maybe without the magic.