So some Garmins have touch capability (afaik Fenix 7 series has this), and Sleep as Android app blocks button inputs (to prevent you exiting out of the app). Now if you have touch enabled and cover the screen, you close the app/turn off the display. As you’re guessing, this results in the app exiting and a loss of connection with the phone and watch, hence the weird graphs. It just takes one cover up to completely exit the app