Apple's health app is extremely careful not to say what is 'good' or 'bad' about the metrics it monitors, I find. The sleep tracking really just gives you a breakdown of sleep stages and length of sleep, rather than a sleep score that the o ther apps give you. I believe that is what Karpathy is comparing, not the telemetry itself, rather the measured sleep quality mapped to his perceived sleep quality, which Apple doesn't really give you.

From TFA: Maybe there is a better app on Apple Watch for sleep tracking, but I haven't found it.

And what other apps were tried? As you ask, why not try the default? From what I hear, it is “better” (for whatever that means) than Garmin, for example, on sleep tracking. I dunno, it is kind weird to start comparisons with some random paid app rather than the built-in that Apple offers for free.