While already using the Online Network option, after pressing the sleep button on my Switch while signing into my Microsoft account and waking the console back up again some time later, being brought back into the game's main menu showed that the sign-in failed and that I had also been singed out of my Nintendo account in-game too. I have no problems reproducing this.
After investigating (i.e.: seeing how much I could break things) a little more, I found that putting the console into sleep mode after switching from Local Network to Online Network while signing in to the MS account can occasionally cause the game to crash, but more often than not throws a Switch network error [Error Code: 2110-4004 - Internet connection lost because the console entered sleep mode.].
Thank you for your report!
However, this issue is Invalid.
Whenever two devices are connected on a network, each checks periodically that the other is still connected. If not, it breaks the connection and cancels any sign-on that was in effect. This is entirely normal behavior, and is not a bug.
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