Thank you. Love the diagnosis. It was like you knew the case.
I misspoke- it is a clicking sound and not a knocking sound.
The clicking sound started after I had asked the dealer to repack the bearings to fix the steering wheel shaking.
This week, when I lifted the car and checked for play by holding it at the top and bottom, there was significant play in both the wheels. I am very naïve about the car’s mechanics. One day, I will start fixing stuff myself. For now, according to the mechanic - One of the CV axle appears to be after market. The other boot appears to be eroding. He recommended I get new CV axles and bearings.
Sincerely appreciate all the advice and possible path forward.
Unfortunately most shops can't keep a good mechanic.
Find a 100 series specialist in your area. Or. A good Dealership.
A sign of good: Is mechanic and other employees, have worked there for many many years. I've one Toyota Dealership near me, most have worked at for 20 plus years.
Your FDS:
Likely, the factory FDS were replaced due to improper wheel bearing service which can damage them and or minor FDS boot clamp weep. Boot clamp weeping CV grease is common. Wherein, all that is needed is a new clamp. But many shop replace the FDs needlessly instead. They end up putting on junk aftermarkets or manufacturer FDS,
The fact you "feel" loose wheel bearing now, after a wheel bearing service. Indicates a shop and or a tech, that has no clue how to work on these 100 series.
It's suggested (above) the 12 & 6 o'clock inspection play. Could be bad ball joint or control arms bushings. This is true! But not likely at 86K miles. Unless accident damage or the upper control bushing bolts here left loose. When alignment is done, the upper control arm bolts/nuts are loosened. If not re-torque, you "may" get a false 12 & 6 o'clock feel, "I suppose". But I did test on one with accident damage Wherein accident damaged UCA bushing and body shop made a mess of the whole system. Also when SPC upper ball joints installed, we do feel a lot of play. As they are designed with play. So yes there is cases, where we get a false loose wheel bearing feel.
So a second wheel bearing test, is placing finger between wheel and brake caliper. If finger pinched while doing the 12 & 6 (modified 2 & 8 o'clock) play inspection. Then wheel bearings are loose.
In your case:
It's most likely Dealership Tech did not properly pack the wheel bearings. Unfortunately it's near impossibly to find a shop, that does the job by the book (FSM) (Factory service manual). Either they known how, and take to many short cuts to complete service in less than book time (flat rate) and or make mistakes. Or they've no clue and don't open the FSM. The worst is usual when a Brake shop replaces front rotors. Those techs, really make a mess of our front wheel hub.
Here a video less than 2K miles after a Wheel and FDS service. From a shop that claims in their name, to be a Toyota & Lexus specialty shop. We've found them to not only to do terrible service work, damaging 100 series. But crooks as well. In that if you take back for do over of a bad service work done. They'll says it's something else not their fault, and charge big $$ to correct.