Hello, this is Emily.
In order for Windows Hello to work with facial recognition, having a working camera is not enough, you need a camera that has infrared capacity. If you just have a regular HD camera, you will get that error message that it is not compatible.
I did look up the specs of the camera on this model. That's exactly the problem. Yours is just an HD camera. Here is the info from Dell's official website: https://www.dell.com/support/manuals/en-us/xps-...