Agreed that the behavior should be dependent on the existence of
external display and keyboard where the current behavior would make
sense.

I tried how Windows 11 behaves and it did not seem to wake up on mouse
events when laptop lid is closed.

This did not seem to change the behavior:
sudo sh -c "echo XHCI > /proc/acpi/wakeup"

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https://bugs.launchpad.net/bugs/1998964

Title:
  Laptop wakes up from sleep when lid is closed if mouse is moved

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