There is currently a known issue where it doesn't work to set up Windows Hello after updating to Fall Creators Update. If you already had facial recognition set up for Windows Hello it might work if you just updated, but if you did a fresh installation with Fall Creators Update or didn't have it set up at all yet, then it will unfortunately not work to set it up.
This is the common error that shows up in Event Viewer:
Package Microsoft.BioEnrollment_10.0.16299.15_neutral__cw5n1h2txyewy+App was terminated because it took too long to suspend.
We're currently investigating the issue, but unfortunately, there's no workaround for now.
Meanwhile, please bear with us!