UPDATE #3 - I cant believe I'm typing this at almost 1:00am, but I do my best thinking in bed.

I was thinking that Sleep Hours is an irrelevant option for an offline account. I mean, if its offline, why go to sleep, or why awake? If you are offline, the expectation is that the account will be managed manually with the Qsync option (either manual or on a defined interval). Therefore, the option shouldn't even be there if a mailbox is defined as offline. If should only be available for online accounts, which makes sense that they could be asked to go to sleep during certain hours to save battery and connection time. Does this make sense?

And while I was at it, I decided to advance the clock to 7:59am and see if it would wake at 8:00am, and it didn't. I had to manually tell it to go connect and online. That didn't seem to work as expected.

When it was online, I manually advanced the clock to 5:59pm to see if it would go to sleep. It deactivated the connection and went to sleep, showing a Z8:30am on the bottom right. That worked as expected.

As a side note, I went in and redefined my one online box as offline, and at that point I still had sleep hours defined, and when I went back to the main screen I got the Z12:00am on the bottom right. I went back, turned off sleep hours (all accounts are now offline) and did a Qsync All, and all is good again. Maybe this info can help.

So it goes to sleep OK, but it wont wake up Ok. Now its my turn to go to sleep, so I can wake OK ...