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There're no penalties for not sleeping unless sleep's necessary for something else, like preparing spells afterward. However, everyone knows sleep's a thing, so folks sleep even if the game doesn't mandate they must.

There're no penalties for not sleeping unless sleep's necessary for something else, like preparing spells afterward. However, everyone knows sleep's a thing, so folks sleep even if the game doesn't mandate they must.

The book then goes to mention that for the Appalling Fecundity sign, you can't recover the wisdom damage, but clearly that's not the case for normal sleep.

It's likely that the Wisdom damage continues to accumulate thereafter until the creature falls unconscious. It would be fair to assume that all effects of a lack of sleep (the fatigue, exhaustion, wisdom damage, or insanity effect) cannot be mitigated in any way except by sleep. Further, the fatigue and exhaustion vanish after a daily rest. The Wisdom damage caused by lack of sleep can only be recovered by sleep, and once the Wisdom damage from a lack of sleep drops to the number of Hit Dice or less, the insanity effect ends.

The book then goes on to mention that during the Appalling Fecundity sign, one can't recover the Wisdom damage caused by lack of sleep (which is pretty clearly not the case for normal sleep loss). To clarify, the Wisdom damage accumulates until the creature falls unconscious, and lack-of-sleep effects (fatigue, exhaustion, Wisdom damage, insanity) are fixed only by sleep.

A living creature can go without sleep for a number of days equal to its Constitution modifier (minimum one). Thereafter it is fatigued, remaining in this state for a number of days equal to its Constitution modifier (again, minimum one); if it would become fatigued during that time, it is exhausted instead. Each day after that period, the creature takes 1 point of Wisdom damage. If the total Wisdom damage exceeds its Hit Dice, the creature is affected as if by an insanity spell. Once its Wisdom score drops to 0, the creature becomes unconscious but cannot recover lost Wisdom naturally. (ElE 9)

A living creature can go without sleep for a number of days equal to its Constitution modifier (minimum one). Thereafter it is fatigued, remaining in this state for a number of days equal to its Constitution modifier (again, minimum one); if it would become fatigued during that time, it is exhausted instead. Each day after that period, the creature takes 1 point of Wisdom damage. If the total Wisdom damage exceeds its Hit Dice, the creature is affected as if by an insanity spell. (ElE 9)

The book then goes to mention that for the Appalling Fecundity sign, you can't recover the wisdom damage, but clearly that's not the case for normal sleep.

It's likely that the Wisdom damage continues to accumulate thereafter until the creature falls unconscious. It would be fair to assume that all effects of a lack of sleep (the fatigue, exhaustion, wisdom damage, or insanity effect) cannot be mitigated in any way except by sleep. Further, the fatigue and exhaustion vanish after a daily rest. The Wisdom damage caused by lack of sleep can only be recovered by sleep, and once the Wisdom damage from a lack of sleep drops to the number of Hit Dice or less, the insanity effect ends.