I’ll quote from the Shulchanaruchharav site how he explains the minhag Chabad, MS, you can tell me if it’s wrong:
“The Chabad practice is not to sleep in the Sukkah due to that one is unable to be conscious of the holiness of the Sukkah during sleep, and this causes one painful, and anyone who is in pain upon dwelling in the Sukkah is exempt from the Mitzvah”
In another article:
“The reason behind the custom is due to another aspect of the exception of Mitztaer/distress, which exempts one from sleeping in the Sukkah, and was not listed above. This aspect of Mitztaer is explained as follows: The Sukkah contains a sublime level of holiness, or G-dly revelation, called Makifim Debina. Chabad Chassidus emphasizes the study of Chassidus which internalizes the knowledge of the above level of Divinity. One who has knowledge of this holiness contained in a Sukkah, will naturally be disturbed to perform any action that is unbefitting of the holiness it contains. Now, since during sleep one is unable to be conscious of the holiness of the Sukkah, as well as the act of sleep in it of itself can be viewed as a disrespect to the holiness of the Sukkah, therefore there is distress involved in sleeping in the Sukkah. Accordingly, since sleeping in the Sukkah causes one spiritual pain, he is exempt from doing so, as anyone who is in pain upon dwelling in the Sukkah is exempt from the Mitzvah. This reason especially applies to those Tzaddikim and Chassidim who are on a level that they could feel the holiness of the Sukkah, and therefore simply cannot fall asleep. Furthermore, it even applies to those who do not feel this level of holiness, if they are nevertheless distressed over the fact that they know it contains this holiness, and are disturbed to act in a disrespectful way towards it, such as to sleep in it. Furthermore, it even applies to those who are not disturbed to sleep in the Sukkah due the holiness of the Sukkah, but simply due to the fact that this is the custom of their Rebbe, and they are distressed to not follow in their Rebbe’s custom. As stated above, if none of these reasons, or other exceptions, are applicable, and one hence finds no disturbance at all in his sleeping in the Sukkah, then he is obligated to do so.”