My experience with U3 overnight, fwiw:
I do use Sleep focus, as I mentioned. It seems to mute any notifications from Messages, Mail, etc as expected.
I do have a Medication set up in the Health app to take at 5:00am. Normally I'm up by then, but if I'm "Sleeping in" I do still get a haptic buzz at 5am (and a reminder at 5:30, if still not up). Sleep Mode is still enabled at that point.
Not seeing any connectivity problems. I'm using iPhone 15 Pro Max, but just updated to 26.2.1 yesterday. Watch also updated overnight; it was a rare night where I didn't wear the watch as the battery was low so put it on my bedside charger overnight to charge & update. Normally I can catch the low battery during the day & put it on the "Fast Charger" for an hour or so but yesterday we were out for dinner so didn't have that opportunity; just put it on the slow charger at bedtime.