Honestly not sure. I have since learned that one big flaw in the way I tried to use sway before was that I did not have a polkit service running. Because of this no escalation requests to root could be actioned, and in general the shell was unaware of a lot of things being triggered. I wouldn’t be surprised if the lid sensor was just not being utilized because it wasn’t getting routed to the correct service.
That said, I REALLY like Sway, and I think I am going to try to set it up again. I’ll report back here when I manage to find time for that. I’m interested in your results, but I’ll share mine as well.