I can't pretend to understand how LLMs work, but I can be sure that anthropomorphizing their functions is not helpful to an objective debate over their abilities. Does a motor vehicle get "sleep" when it is serviced? When I reboot a computer, is that equivalent to a nap?
The analogy is helpful, but yes we should be able to “intelligently design” something better than sleep analogues since we’re not constrained by evolution like in humans.
At the very least, we know that sleep and dreaming do exist in biological brains. (Doesn't mean any of it is applicable to artificial neural nets, doesn't mean it'll work for our specific architectures etc. etc., but at least the idea requires fewer assumptions than a completely untested novel theory.)