Touch ID not working... home button works fine

The iPhone 7/8 series have a very inconvenient bend on the Home Button flex. It’s really easy to tear the flex, either near the logic board connector or at the 90 degree bend before it sneaks underneath the LCD heat shield. You have to be careful when you lift the screen off the first time but also anytime the flexes are connected and you have the device open.

The other area that is easily damaged is the connector on the Home Button itself and the opposite connector on the short flex that runs underneath the heat shield.

The long and short of it is that there are multiple failure points. You will need to carefully inspect the Home Button and flex to see if there is any damage. Magnification here will help.  Look for tears to the flex or any physical signs of damage. You should also check the connector to insure none of the pins are damage or that there isn’t any debris.

Unfortunately, there is no real DIY way to fix a Touch ID issue, only Apple can replace it.