The critical information was found on this page: https://forums.linuxmint.com/viewtopic.php?t=211313
We theorized that a driver needed for the laptop keyboard is on the encrypted drive and therefore not yet available when the password was needed.
using lsmod showed more than 100 modules loaded. Which ones were needed for the keyboard wasn't clear (simply using those ones that mention "hid" was not successful). We simply added all modules shown by lsmod to the /etc/initramfs-tools/modules file and re-created the initramfs.
On next boot the keyboard was operational and usable for entering the disk password.