Switched from iPhone SE 2016 to an iPhone Mini, tbh the loss of touch ID alone was enough to mean it felt like a big quality of life drop. Less so now that I don't have to be wearing a mask so often but still feels significantly worse and I'd happily trade some screen space for it.
I suspect a big chunk of why the SE is still around with its current design is a concern of how put off some older users may be from having to adjust to a less consistent unlocking system.
Its been 5 years since FaceID came out. My bet is on the fact that they need a low cost model in the lineup and they still have the old tooling for the iPhone 8 series so TouchID just happens to be there. Apple is not the type of company that keeps legacy things around if they can help it regardless of how some users might feel.
I suspect a big chunk of why the SE is still around with its current design is a concern of how put off some older users may be from having to adjust to a less consistent unlocking system.