I am having the exact same issue. The integration of the new MacBook Pro and the Ultrafine monitor his HORRIBLE. Throughout the day, if the computers go to sleep, the LG UltraFine will not come back on. Or, the MacBook will just restart, and the error report is SleepWakeFailure.
Not only that, but hot swap plugging (unplugging the monitor or vice versa) to pick up the laptop and take with you rarely works, causing one or the other to go blank and not come back.
Also sleep in general is very inconsistent with the new MacBook Pro 2016 with Touchbar.
All in all, the whole integration of the OS, the sleep/wake, and the new LG monitors seems like the old days when I was using a Windows laptop where none of those things were reliable.
I was always amazed at how well the Mac could hotswap on and off with Apple's Thunderbolt Display, how reliable and fast Sleep/Wake were, etc.
Now it's an utter disaster.
I am really wishing I hadn't sold top of the line MacBook Pro 2015 Retina and 27" Apple Thunderbolt Display. Those were reliable and worked perfectly all the time. The new LG and new MacBook Pro Touchbar - not so much.
So Apple, before I start wanting a refund, is this hardware or software related? Hoping software, but if not, you've got a computer and 2 LG 5K displays on their way back to you.