SteamOS freezes on sleep in Desktop Mode

Your system information

• Steam client version:

Steam Beta Branch:  Steam Deck Stable
Steam Version:  1784778118
Steam Client Build Date:  Thu, Jul 23, 2026 05:28 UTC +01:00
Steam Web Build Date:  Tue, Jul 21, 2026 23:18 UTC +01:00
Steam API Version:  SteamClient023

• SteamOS version:

VARIANT_ID=steamdeck
VERSION_ID=3.8.16
BUILD_ID=20260716.1
STEAMOS_DEFAULT_UPDATE_BRANCH=stable

• Opted into Steam client beta?: [Yes/No] No
• Opted into SteamOS beta?: [Yes/No] No
• Have you checked for updates in Settings > System?: [Yes/No] Yes

Please describe your issue in as much detail as possible:

Similar to what was described in this issue, my SteamDeck OLED freezes up when sleep is initiated in Desktop Mode.
Some more details on it:

1. It is connected to the peripherals and monitor via a KVM (this one), but the same behavior happened when it was connected to them via a USB-C dock.
2. What happens is, right after sleep has been initiated via the launcher menu click, the screen starts to dim, dims almost all the way and freezes in this state. Mouse pointer stays clear, but unmoving, haptics from the connected Apple TouchPad keep working (meaning, it is receiving signals back from OS on clicks), but it is completely frozen otherwise and only hard shutdown via power button holding helps.
3. Sometimes (and I haven't quite figured out, when and why it gets to be this way) after hanging in this state for a minute or two, it comes back to fully functioning, but with WiFi error, that no connection could be established. If sleep is triggered again after that, it goes into sleep normally and wakes up without an issue.

The issue was sometimes popping up on 3.7, but it was a rare occasion and I attributed it to my extended swap/distrobox/heavy software running. With 3.8, it happens pretty much all the time.

Steps for reproducing this issue:

1. Switch to desktop mode
2. Initiate sleep via launcher menu

I will try different states of the system to try and add more details on reproduction. So far, running or not running distrobox, other applications, updates etc. haven't had any effect.

Compare this report with issue #2355 first, then reproduce the freeze from Desktop Mode using the listed SteamOS 3.8.16 environment and the documented sleep steps. Check whether the KVM, dock, peripherals, or WiFi behavior changes the result. Done means sleep completes and the Steam Deck resumes reliably without requiring a hard shutdown.