Why is Sleep eating so much battery? What about battery overheating?

Usually battery consumption issue or related issues causing phone over-heating during sleep tracking are not caused by the sleep tracking directly.

In most cases sleep tracking itself is not consuming too much battery (usually around 1-2% per hour of tracking). But because we hold a wake lock (keeping the phone awake) any other usually badly written apps may access the CPU extensively during the sleep tracking time. We would suggest checking which services are running before you get to sleep. For us it is hard to debug this. Also battery statistics are not a hint here as all battery consumption is accounted to the app which holds the wake lock even it did not consume the battery (this is by design in Android).
A good test would be to reboot your phone before sleep tracking (or kill any unnecessary services running) and see if sleep tracking will still consume too much battery afterward. Features within Sleep as Android which may cause higher CPU load during tracking include noise recording. You may try tracking without it for a reference. Also I would strongly recommend to track with airplane mode on.