(Apple Watch version 10.3.1, Model A2092)
I was wrong to think it was solely the iOS update that caused the Sleep mode problem; I am back to this forum one day later to report that my watch was still in Sleep mode this morning when I took it off the charger, yet my phone went out of sleep mode when I turned off the wake alarm an hour earlier. Additionally, after taking it out of sleep mode, I noticed my messages had not synced with the phone - it showed I had 3 unread messages, yet on the phone all was clear.
I did a hard reset (hold the crown and the side button until apple logo comes up), and when it came back on, I went to unlock it and the screen went black! I could hear the 'clicks' each time I tapped the screen, but saw absolutely nothing!
Another hard restart got me back in and I was able to unlock the watch. It still had not synced, so I checked to see if it was paired via its control center to ping my phone and it told me "iPhone Not Connected."
I restarted the phone, and when all was back up again, the watch then showed that the iPhone was connected again.
However, my messages still had not synced - so not sure if it was still ok, so unpaired the watch and re-paired it.
After forever (it felt), the watch finally finished reloading everything and the messages now seem to have synced, inlcuding two I sent after the watch was back up and running - one from my phone and another from my computer.
If anything changes, I'll update.