FaceID setup not working on iPhone 13 after iOS 26 update

FaceID worked just fine before the update and then slowly but surely started to work less and less. I now tried a reset of FaceID and now iphone is telling me to hold the camera lower and refuses to recognize my face. I hold it within 25-50cm, higher, lower, different lighting. Doesn't make a difference. I've (needlessly) removed my screen protector, there isn't a scratch or dust particle anywhere on my screen, let alone the island. Nothing will work.

All steps I tried in order:

Update to iOS 26.1 (23B85)

Cleaned the screen

Removed the screen protector

cleaned the screen

checked for scratches (none)

Restarted the phone (volume up/down/Power etc)

Reset FaceID

Now, when I try to set up FaceID, the system keeps telling to "move the camera a little lower". The camera is out of focus or in focus. It does detect when my face is too close, but when my face is in the square brackets, nothing. I can even point at the wall and it won't change the message.

I'm at a loss. I don't want to have to reset my phone completely, only to discover that it also didn't solve the problem.

It is as if part of the code that determines the face's distance to the camera isn't working properly and therefore the phone assumes there is no face.