Yes, users are still able to log in with TouchID. As a pre-requisite to setup TouchID, users must create a passcode. You can use OMM to specifcy the requirements for that passcode (complexity, length, etc.).
Apple has a pretty good write up on TouchID here: https://support.apple.com/en-us/HT204587 if you want to learn more.
What about mobile applications that are deployed via Okta Mobile? I want my users to be able to use TouchID to access a custom iOS app without having to enter their Okta User Name and Password every time they log in. TouchID would easily solve this.