I am not talking about password compromise, but if somebody gets my
phone, he just needs to turn it on to get data decrypted, so what’s
the point? For what cases is this encryption designed?
I'm not sure from where you are quoting this statement, but it's false. Physical access to the device does not guarantee automatic decryption of the disk.
From the ...
You have the exact same feature on an iPhone - which is a good indication that it is not some Android limitation but absolutely intentional.
And it is intentional. It means that if someone somehow manages to add their fingerprint to your phone, they will be locked out after some time. Same in case of the one-in-thousands chance that a thief's fingers match ...