Item description:

True sleep passes time. It doesn't just move the sun or randomly spawn a monster. The world will go on, with or without you.

While you're sleeping, the world continues as if you are standing idle the whole time. Crops and trees will grow, smelting continues, weather progresses, mobs are active (even mobs added by other mods), and dropped items decay. You also heal an amount based on how long you've spent sleeping and the difficulty setting, but you'll also grow hungry. The simulation will take a few moments.