When my pixel 7 doesn't recognize my fingerprint, I press my thumb on the side of my nose to pick up a bit of skin oils and then my thumb print is recognized.
The Pixel 7 series has an optical sensor under the display. I wonder how some oil/cream/etc helps? The newer ones have ultrasonic sensors, so that should be better.
If your skin is dry enough it won’t make good contact with the screen so the “picture” will be bad. Adding a thin layer of oil basically acts as an optical transmission layer. Ultrasonic ones would probably have the same issue, honestly.