Per Apple:
Always-On display goes dark when you don't need it. To save battery life, the display is completely dark when:
• Your iPhone is lying face down
• Your iPhone is in your pocket or bag
• Sleep Focus is on
• Low Power Mode is on
• Your iPhone is connected to CarPlay
• You're using Continuity Camera
• You haven't used your iPhone for a while (your iPhone learns your activity patterns and turns the display off and on accordingly, including if you set up an alarm or sleep schedule)
• Your iPhone detects that you moved away from it with a paired Apple Watch (Always-On display will turn on when your Apple Watch is close to your iPhone again)
Source:
https://support.apple.com/en-us/HT213435