I have the same problem, I sent a report yesterday. I’ve followed the instructions on dontkillmyapp and I can tell from reading the log with timestamps that it’s not apparently related to sending/receiving the batch from the watch, or anything about disconnection, because batches are getting received INSIDE the red interval on the graph, yet they just appear as red on the graph for some reason. I tried 7/8/9 hour sleep and it’s almost consistently (eventually ±2 mins) the latest 20 minutes of the graph that is red, while on a 30 minutes nap it’s the latest 3 minutes. It’s been a week and it has happened 100% of the time.
I am not sure if it is only a bug on visualizing the graph, because sometimes the alarm rings (almost) correctly inside the smart window.
Samsung S22 Ultra on Android 14 with Galaxy Watch 4