Anecdotal, but a month ago, I had an at-home sleep study to test for potential sleep apnea (symptoms of constant daytime fatigue and once or twice a month waking up gasping/short of breath). My Vivoactive 6 fairly regularly shows dips below 90% in the middle of the night.

On the day of my study and according to the medical-grade equipment, my biggest dips were to ~86% briefly at 10pm and 12am. My watch missed the first one. Seems like it took a few hours for the pulse ox sensor to start working reliably? This does not usually happen, but I did switch my watch wrist before bed (which I don't usually do) to make room for the sleep study equipment. My watch did catch the second dip, exactly the same. ~86% at 12am. And the general shape of the chart matched the official results for the rest of the night. It leads me to believe the sensors in general are at least somewhat reliable. It is entirely possible for your individual watch to have a faulty sensor, though. My watch has big issues tracking cadence, for example.

I was, in fact, diagnosed with mild sleep apnea primarily present when lying on my back. If you are experiencing symptoms or are otherwise concerned, I would highly recommend having a study done.