I have had similar issues. Though mostly it doesn't recognize when I wake up (even after walking around while it does track my steps). Many times while I am reading it records me in REM.
If I wake up for a half hour or so and then go back to sleep (getting physically out of bed in-between due to a work call, restroom, or really anything. One of two things seems to always happen. Either it doesn't record that I was awake during that time or it doesn't record that I ever went back to sleep. The other day I woke up after 3 hours, was up for an hour and decided to go back to bed. I slept for another 8 hours. The App recorded that I had slept for 6 hours, starting before I fell asleep the first time to nearly an hour after I got out of bed. It did not however record any of the over 8 hours of sleep afterwards. I can manually extend the sleep time but the unit doesn't handle more than one period of sleep a day and if I manually extend it then it includes the hour+ I was a wake which doesn't let me point out that it is in correct.
I would love to see Garmin take the information of people adjusting their sleep times and allow them to add (or report) awake times in the middle and use that to better learn to recognize sleep stages. We are in the age of machine learning and Garmin is collecting a ton of data. Studies have shown the devices to only be about 70% accurate for sleep on average, so there is a long way to go. Perhaps monitoring information from the real world would help improve its accuracy.
