Numerous Pixel and Nexus users have been reporting unexpected fingerprint sensor issues in online communities like Google product forums, after updating their device to Android 7.1.2 via over-the-air (OTA).
It seems the issue is widespread and not isolated to any specific device as it's affecting the Pixel and Pixel XL, as well as the LG Nexus 5X and Huawei Nexus 6P. Although the swipe down Moves gesture for notifications seems to be fully functional, the users are unable to access their device after using the fingerprint scanner/sensor for authentication purpose.
Furthermore, it is confirmed that deleting pre-existing fingerprints and trying to set up a new fingerprint hasn't yielded any positive results as error messages continue to pop-up and block the user from adding a new fingerprint to the affected device.
Google is yet to acknowledge this problem. However, the company is expected to offer an official fix with the forthcoming Android updates for Pixel and Nexus devices.