Insulin pumps (and their cannula; not a "needle") are installed 24/7. They can be "suspended" and the insulin delivery hose unhooked, but they are generally there, and active, at all times. Likewise, a CGM (continuous glucose monitor) will provide, as the name says, continuous monitoring. Both use adhesives to keep them attached and generally remain so, even while sleeping.
Hypoglycemia also may not lead to "waking". After all, a diabetic coma may result from low blood glucose, depending on how quickly it crashes.
Diabetic coma is caused by prolonged hyperglycemia (too much blood sugar) and diabetic ketoacidosis. Many diabetic patients go through months of hyperglycemia and even ketosis before they even know that they have diabetes.
Hypoglycemia in healthy adults mainly results from not eating and develops rather slowly. It's hard to recognize at first, but it will get a lot more obvious before it gets serious.
Hypoglycemia in diabetic patients is more often caused by too much insulin delivered at mealtime and this happens more quickly. Patients can become unconscious before they notice the problem, but usually they recover even without treatment. The goal of diabetes treatment is to avoid this hypoglycemia, also because the body reacts with increased glycogenesis leading to an overshoot of blood sugar.
There are sometimes suicide attempts with insulin. This rarely succeeds, it can result in brain damage, but mostly the patients wake up sometime later.
At night an insulin pump would not need to deliver that much insulin. There are also very long-acting types of insulin, which may be preferable to the short-term insulin in the pump to achieve the "baseline" during the fasting period. Or not. That's a strategy question, I guess. I had type 2 for a short time, and I used long-term and short-term insulin at meal times, with the finger-pricking type of measurement.
I don't think insulin pumps would carry enough insulin or are able to deliver enough.
My point is that there is a relatively large margin of error for any algorithm or software before serious harm occurs, and that the continuous monitoring and delivery is already superior in achieving good glucose curves, regardless if the control loop is manual or automatic.
I've read that continuous sensors help patients to have fewer incidents of hypoglycemia.
You can loose consciousness from hypoglycemia, but normally the body will do everything it can, even autophaging your heart muscle proteins to bring it back up. Unless you have been fasting for a really long time, it will just release glucose from glycogen reserves and you recover quickly.
The diabetic coma thing is the opposite spectrum when the blood sugar is extremely high but the cell metabolism has to run on ketogenic fuel because it gets no glucose. Which leads to ketoacidosis, which can ultimately lead to a coma.
You wake up from hypoglycemia, long before there is more trouble. And the sensor doesn't post glucose levels for example if it gets detached.