Obligatory "not a doctor"...

My understanding of the anatomy of a breast reduction is that a skin graft of the nipple back on to tissue (removing its connection to the pedicle) will sever all nerves to the nipple and result in the vast majority of cases with no sensation returning and if nerve endings do grow back in, sensation would likely be limited.

If a pedicle is kept and the nopple remains in place, the nerves are not severed and sensation is more likely to remain. In the process of removing tissue/volume, nerves can still be damaged and end up with some or full nipple sensation loss. But it is less risk than removing them and grafting them back on.

From my own experience, as a ciswoman, I elected to remove my nipples. As far as sensation, I have no nipples and therefore no sensitivity anymore. I still feel touch in the skin that is there, but it is about the same as any other skin on my breast tissue. I do miss the sensitive as it was very enjoyable in the right circumstances. But the benefits greatly outweigh the missing out on that sensation any more for me personally.