Fossils can only generate near bedrock in 1.17. they don't seem to go anywhere above y=4. Im not 100% sure if this is true but i went in a world in 1.16 and found 2 fossils near y=50 then same seed in 1.17 and found around 10 below y=4 and none over y=4.
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We're tracking this issue in MC-227520, so this ticket is being resolved and linked as a duplicate.
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Duplicate of MC-227520; this is fixed in 1.17.1 Pre-release 1.