NPCs appear to operate according to the local time of the cell they’re in. So they sleep on UT in your ship in space and Jemison time (local hour == 125 UT minutes) in the Lodge. The game doesn’t appear to have any issue with this whatsoever.

Vendors, and many quest-related NPCs never seem to sleep or eat. It looks like some of this was done to decrease player frustration. Now we never have to wait for shops to open and we never have to worry if we arrived to confront a corporate exec while they’re out or sleeping. It simplifies the work the designers have to do too. They could have designed around this, but might have considered it a low priority to have night-shift workers or different kiosk rules.

Meanwhile the members of Constellation use their bedrooms (except Cora who seems to wander the basement at night), and that guy living on disability in Cydonia keeps going to back to bed without asking me for the next book. Muria from the GalBank lobby in New Atlantis likes to go sit at the outdoor TerraBrew all night and have a non-conversation with the diplomat lady.