Is there a way to authenticate with password when this prompt appear?
I do have a fingerprint reader but sometimes I use the laptop with KVM attached and laptop completely closed, so no fingerprint access.
It looks to me like that is a dedicated popup. I don’t use a fingerprint and it always asks for password. Since you appear to prefer the fingerprint reader it asks for that.
I am sure there is a way to modify that, but I have not dug into things that far. Possibly the lid switch could disable the fingerprint reader so it asks for password instead.