After upgrading to 10.12.1 my Mac no longer locks after display sleep. Before the update, a login prompt always appeared. This is either using:
- The keyboard (⌘ ⌥ power)
- Timing out (set for 10min)
- Closing the clam shell.
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So I figured it out a solution as soon as I could ask.
I toggled the Require Password settings to "Immediately" then back to my previous "5 seconds" and now all seems to be working properly.
This required my password each time but well worth the re-enabled security. You may even be able to just uncheck then recheck the Required box. I can't test this because my issue is fixed.