Yes and Macs have worked like that since the PPC days. Display closed + no external display connected = sleep. Removing said display will also make it sleep.

I guess it's a bug or some monitoring service that crashed.

Perhaps it was Amphetamine with the relevant setting to prevent sleep with built-in display closed.

Any fullscreen apps using the GPU will prevent a MacBook from sleeping when the lid is closed. Games, YouTube, even some GPU-heavy apps can prevent it from sleeping.