Microsoft M4000 Wireless Mouse Transceiver Prevents Monitor From Turning Off and Sleeping

After doing all the powercfg and waketimer checks, I unplugged the wireless mouse transceiver and the monitor turns off and windows sleeps as expected.

The problem with this M4000 wireless mouse transceiver has been around since Windows 8.1:
Redirecting

For the record, I am running Windows 11 Pro, Version 21H2, (OS Build 22000.856)

Just an FYI.

Cheers

I don't know if it applies to you since you use MS mouse and keyboard but I had the same issue using a Logitech wireless mouse. Here's what solved it for me.
I have (one) Logitech wired keyboard and (one) Logitech wireless mouse. In device manager under 'keyboards' Windows listed 2 devices - HID keyboard device and Logitech HID compliant keyboard. Under 'Mice and other pointing devices' it listed 2 devices -HID compliant mouse and Logitech HID compliant unifying mouse. When I unchecked 'allow this device to wake computer' on everything but Logitech HID compliant keyboard, the mouse no longer woke the computer.

So in your case, if you have 2 keyboards listed and 2 mice listed, you would need to change the settings on them all except the one device you want to wake the computer. (or all of them if you want no device to wake the computer)

This may not apply to you at all if the MS devices populate device manager differently.