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I'm about to enforce 2 factor authentication for all g suite accounts - what happens if I enforce it and some users didn't enable it for their accounts yet? Will they be unable to log in or do they get a prompt on their next login to set up 2FA?

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Yes, users won't be able to log in if they don't have 2FA enabled when you enforce it. This is covered at the top of the article for 2FA enforcement:

Before enforcing 2-Step Verification, make sure all of your users and administrators are enrolled in 2-Step Verification. You can place users not yet enrolled in 2-Step Verification into exception groups so they will not be locked out of their Google accounts when you enable 2-Step Verification enforcement.

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