If you are using ubuntu 22.04 I am 100% sure that the issue is due to the old dracut version that is shipped with this Ubuntu.
Run
dracut --list-modules | grep tpm2
to confirm that this module is missed or check if you have folder /usr/lib/dracut/modules.d/91tpm2-tss/
There is a simple fix. Copy required modules folders from the dracut-059 Releases · dracutdevs/dracut · GitHub
01systemd-sysusers
01systemd-udevd
91tpm2-tss
Detailed steps can be found on the gist - Dual booting Windows 11 and Ubuntu 22.04 LTS with LUKS and TPM2 encryption · GitHub