I use the Facet module
version 8.x-1.x-dev. I have a list of taxonomy terms with parents and childs.
The taxonomy term facet is an Entity reference field. I can't get the hierarchical structure working in the frontend.
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I was confronted with the same problem, Meez's comment helped me on my version (Drupal 8.9.9, Search API 1.17.0 and Facets 1.5.0), to have the option
Transform entity ID to label on the facet, you must not go through the selection of an ID or Name attribute on the taxonomy field in
admin/config/search/search-api/index/MYINDEX/fields, use it directly in the reference field of taxonomy (
field_myfield_taxonomyreference). Everything else is fine, thank you.