Ok, so it looks like there are multiple causes. Yes, check to make sure Goodnight and Theatre mode are off. But those weren't my problems, and I put too much time into customizing the settings and app/shortcut layouts to reset it, so I was NOT about to reset everything.
I actually fixed this using a different watch band. If the sensor isn't consistently in contact with your actual skin, the programming assumes it's because you aren't actually wearing the watch, so it turns off AOD to conserve battery. So if your band is either too loose, fits your wrist poorly, or (as was the case for me) you're using a band which places a barrier between your wrist and the sensor (I have this black leather band with that issue, pic attached), then AOD will not work. Reset it and fiddle with the settings all you like - it will keep assuming you aren't actually wearing it. No settings, apps, or others things were changed between these two pics - I just swapped out the watch band.
Samsung, if you're listening, this is a classic, presumptuous, non-human-centered design flaw. Dorks like us want to wear it how we want to wear it, and you'd have more content customers if your features worked consistently with users' different fashion choices. I can think of two easy ways for you to fix this in future updates: 1) lose this automatic "smart" disabling of AOD based on the often false assumption that a lack of skin contact with the watch underside means someone isn't wearing it - seriously, is this automatic disabling of AOD doing anyone any actual good?; 2) add another option within the AOD controls that allows goths (and others) like me to keep AOD on at all times, regardless of skin contact, fit, or watch band choice - this would make everyone happy.
