Steam Broadcasting Prevents Sleep
I noticed my PC wasn’t going to sleep today, and decided to investigate.
Windows has a neat command you can run to find apps and drivers preventing sleep:
powercfg /requests
More on the powercfg
command here.

Turns out Steam’s streaming feature (Broadcasting) is causing the issue, with audio drivers for capturing sound. I haven’t used that feature in years because I use Discord’s streaming, so I went ahead and disabled it in Steam’s settings.
That didn’t fix the issue though. I also tried using powercfg /requestsoverride
for the drivers, but based on all the MS TechNet forum posts, it appears that flag has been broken for years.
What did work: Disallowing apps from using the device for audio in the Windows 11 sound settings. This is the same as disabling the sound device in the old control panel (which you can still access on 11, lol).
This new panel has some wonderful UX with the Allow/Don’t Allow button. At first glance, can you tell which one is the enabled state and which one is the disabled state?
Disabled:
Enabled:
Make sure to disable both the Steam Streaming Microphone and Steam Streaming Speakers devices.
Success:
Alternatively, you could disable the drivers in Device Manager, but you’ll have to reboot afterwards.

After a reboot and waiting a couple minutes, running powercfg /requests
again shows all clear:

However, as I experience regularly with the Nvidia sound drivers re-enabling themselves and trying to set my monitor as the default audio output after each driver update, I’m sure the Steam drivers will get enabled again whenever Valve decides to update them. It’s been 5 years though, so we’ve still got plenty of Valve Time before that happens.