Valve released the latest stable system update with SteamOS 3.7.17 now available bringing bug fixes, but also disabled wake-on-bluetooth for Steam Deck LCD.

The experimental wake-on-bluetooth support for Steam Deck LCD has been repeatedly problematic, being enabled and disabled a few times now. Hopefully Valve can figure out the issues with it soon so all users can benefit from it, as it's especially useful when docking a Steam Deck.