Once a week. It must be 6.5 days with FaceID-only unlocks AND 4 hours without FaceID unlock.
Assuming that Apple engineers aren't stupid, the correct interpretation is "we want people to enter their passwords at least once a week so they don't forget them, but we also don't want to bother them if they're in the middle of something". So yes, once a week, you will be forced to type your password upon waking up.