The difference is that Touch ID was a new security option without taking away the original passcode method.This is almost exactly what people were saying about TouchID when it was first revealed. There were so many "I don't trust my partner/children not to use my finger when I'm asleep" and "I don't want my fingerprints stored". Within a year very view people seemed to care anymore. But the answer is the same now as it was then. If you're not comfortable with it, don't use it.
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Not sure about the "constantly watching and reading me" - tapping the screen or raise to wake should trigger the FaceID function, much like with TouchID, or else battery life would diminish.
Yes that would make sense. Not saying my sense of creepiness is rational or anything.