XS Max Face ID not working after display change

I have a XS Max that had cracked display. Display was cracked on the top so that is blocked the projector in the right part of the notch. Crack was right in the middle of the sensor yellow thing. I installed new display yesterday and carefully made sure every part of the assembly inside the phone is not broken and moved the sensor part form old display to the new one. Face ID is still not working.

Proximity sensor works, ambient light sensor works, speaker works, front camera works. When face ID is tried to initialise phone says move phone up/down. And little red light is on in the left part of the notch when this happens

Only changed part is the display. The display data has not been transferred to the new display so it is missing true tone now.

Any ideas?

I already did a hard reset and the normal SW things.