Windows Hello doesn't require 2.0, it works on 1.2.
There is something interesting regarding the 7700k though on windows (especially 11), users have been claiming windows reports it as supporting TPM 2.0 but they still can't upgrade to windows 11 due to failing requirements. So I wonder if something else is happening there that also seems to be affecting windows hello for you, because on paper at least for windows 10 you should be able to use Hello no problem.
My CPU doesn't support TPM 2.0 with fTPM (and the motherboard manufacturer stopped selling TPMs for my motherboard years ago) so I'm sticking with Windows 10. It told me I could upgrade at some point but that was a false positive. Maybe my install is just broken in some way.
However, I do know that I had to manually enable the fTPM functionality on my motherboard and I highly doubt the average consumer is going to enable such features in their BIOS. I don't know when manufacturers started enabling fTPM support by default, but it's definitely not enabled by default in most 7th gen Intel boards and I doubt 8th gen changed much in that sense.
There is something interesting regarding the 7700k though on windows (especially 11), users have been claiming windows reports it as supporting TPM 2.0 but they still can't upgrade to windows 11 due to failing requirements. So I wonder if something else is happening there that also seems to be affecting windows hello for you, because on paper at least for windows 10 you should be able to use Hello no problem.