Using Touch ID to unlock MacBook Pro in clamshell mode

I just bought a Magic Keyboard with Touch ID assuming I would be able to use the keyboard to unlock my laptop when the lid is closed and I'm using external displays ("clamshell mode"). I have checked all of my settings and simply cannot get it to work. I only have the option to enter my password on the lock screen to log in, no option to use Touch ID.

Anyone else have this issue or a solve? I saw a workaround for connecting via lightning cable and toggling on/off, but it didn't work for me when I tried.

This is the entire reason I bought this keyboard so I'm really hoping there's a solution for this!