touch id is active for unlocking the imac yet when the mac goes to lock mode, the touch id isn't an option

Here is an Apple article for troubleshooting TouchID issues:

If Touch ID isn't working on your Mac - Apple Support

A clean install of macOS is the next step after that if you feel the need. If you have a Mac with the T2 security chip or Apple Silicon, then you may also want to try a "Revive" and/or "Restore" which will also reset the security enclave on the computer if so equipped.

Revive or restore an Intel-based Mac using Apple Configurator - Apple Support

Revive or restore a Mac with Apple silicon using Apple Configurator - Apple Support

Otherwise there may be a problem with the TouchID. Have Apple or an Apple Authorized Service Provider examine it.

That is all that I know to suggest.

My wife's MBP has Touch ID enabled, but sometimes (for certain operations) a passwords is required. When that happens there's a tiny text message saying a PW is required. Are you seeing that? Just a thought

Have you restarted the Mac?

A password is required on first login after startup. A password is also required at least once a week regardless if the Mac has rebooted.

And like @ku4hx mentioned, some tasks will require a password instead of the TouchID for whatever unknown reason.

Check your TouchID settings to make sure TouchID is checked for waking the system or whatever task you wish to use it for. Maybe toggle the setting off and reboot. Then re-enable to see if it makes any difference. Maybe you should delete the fingerprints which should disable TouchID. Reboot. Then after rebooting, setting up TouchID again.

I have the same issue. My MacBook Pro won't even recognize that my Magic Keyboard has a Touch ID option for login or for passwords or any other time I might use the Magic Keyboards Touch ID. However, if I open my MacBook Pro the Touch ID option becomes available for the MacBook's Touch ID but still won't work on the magic keyboard

Well, that's the way Apple designed it and that's how it's supposed to work. This is not user changeable, you have to use the OS as Apple says.