This happens to two different third party watch faces that I have installed, "Quartz" and "Futura". This does not happen with the stock Garmin watch faces.
When I receive a notification on my watch, I typically will just glance at it when it lights up the screen (I have Gesture = Off, Always On = On) and then ignore it and let it time out and go away on its own. When I do this, instead of returning to the third party watch face and then going into the AOD mode, the screen just goes blank.
This worked correctly before the latest Garmin update; I've changed nothing on my end like AOD settings on the watch or within the watch faces.
Anyone else seeing this?