Having the same issue and i'm pretty certain its the recent samsung health update thats broken it..
i've included a couple of screen shots where you can see on the 18th my watch stopped recording sleep. on the 21st i did a factory reset on my watch and it tracked my sleep that night. on the 22nd it auto updated all the apps and stopped recording my sleep. on the 23rd i did another factory reset and it recorded my sleeep again. and last night the 24th after my apps once again auto uodated it stopped tracking my sleep.
i know the sensors are working though because my watch will track my heartrate all through the night. as you can see in the screenshots ive provided .
the fact its recording my heart rate through the night indicates that my watch is keeping good contact with my wrist. and that it records sleep after a factory reset but stops as soon as the app is updated to the latest version makes me pretty certain it is the app thats busted.
Mine stopped working on the 18th as well. I did a factory reset. Nothing has worked to get it working again. I've just had the watch gor 4 months. Very unhappy.