Why does my MacBook Air go to sleep and require login when closing the lid?

Just got this yesterday.

As i was setting it up i noticed that when i closed the lid the desktop would jump to my external monitor. This si what i want as the standard behaviour.

Today, when i closed the lid the Air goes to sleep. I have to wake it up and log back in, using the external monitor.

To be clear, external monitor is working fine. Battery setting is set to prevent sleep. Air is on power and not battery. It’s just this switch over from built in to external monitor that i cant figure out.