Mine used to stay on all night and after updating to iOS 16.1.2 now it shuts off during the night again. It's quite frustrating when you want that feature to work and it does not. *Apple please fix this and make it to where Always on actually STAYS on during the night!* I get that not everyone wants to have it on but give us the option who do want it on!!!!! You've finally added the feature now please let it work by staying on always.
Anyway, I have found a work around but you won't necessarily get your notifications and that's turn your phone off and then turn it back on but don't log in or unlock it, just restart it and put it back on the charger. The 'Always on' will stay on... well, at least it does for my iPhone.