Once again posting something for reference as I couldn't find it online

Symptoms

No issues after logging in.
After suspending (sleep) and resuming, screen takes 25 - 30 seconds to turn on.
Display settings in Plasma take a long time to load, sometimes don't show automatic rotation option.
Turning on screen after turning off (even without sleep) takes a long time.
No suspicious logs in Kernel and Journald (even after comparing post-fix).
Switching kernel makes no difference.
Logging out and back in temporarily fixes screen rotation and screen waking until next suspend.
Everything works in X11 session apart from screen rotation (appears unsupported).
Running monitor-sensor hangs when running after suspend
systemctl stop iio-sensor-proxy fixes slowdown issues

Workaround

Downgrading to iio-sensor-proxy 3.6-1 following Arch Linux package downgrade instructions.
In my case with a cached package

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sudo pacman -U file:///var/cache/pacman/pkg/iio-sensor-proxy-3.6-1-x86_64.pkg.tar.zst


  

and optionally adding it to IgnorePkg

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IgnorePkg   = iio-sensor-proxy # Issues in Wayland after suspend

  

System info

OS: Arch Linux x64
Host: Lenovo ThinkPad L390 Yoga
Kernel: 6.12.35-1-lts
DE: Plasma 6.4.2 iio-sensor-proxy (broken version): 3.7-1
Last full system upgrade: 2025-07-06