It does it all automatically. What Sleep Mode does, if you do use it, is combines a few settings together to help avoid waking you: makes screen dim, prevents screen turning on with wrist turn, prevents notifications, maybe something else I'm forgetting there. But it is completely optional; just left Fitbit figure sleep out by itself.
Before posting, re-read to see if it would make sense to someone else not looking at your Fitbit or phone.
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