It is a Windows setting. It’s purpose is to prevent the screen saver from activating while watching a program that is handling multimedia. It prevents interrupting when you are watching a DVD or Blue Ray and not pressing any keys or clicking the mouse.
When i open Audacity with NO project displayed, the PC goes to sleep. However if I insert a project file and start playing BUT then pause it in order to do something else, this prevents the PC from going to sleep. It would appear that in pause setting the audio player is still in use and therefore stops sleep EVEN if I set the ‘allow the PC to sleep’ in power settings.