When the SM2:0 bits are written to 011, the SLEEP instruction makes the MCU enter Power-save mode. This mode is identical to Power-down, with one exception:
If Timer/Counter2 is clocked asynchronously, i.e. the AS2 bit in ASSR is set, Timer/Counter2 will run during sleep. The device can wake up from either Timer Overflow or Output Compare event from Timer/Counter2 if the corresponding Timer/Counter2 interrupt enable bits are set in TIMSK, and the global interrupt enable bit in SREG is set.
If the asynchronous timer is NOT clocked asynchronously, Power-down mode is recommended instead of Power-save mode because the contents of the registers in the asynchronous timer should be considered undefined after wake-up in Power-save mode if AS2 is 0.
This sleep mode basically halts all clocks except clkASY, allowing operation only of asynchronous modules, including Timer/Counter2 if clocked asynchronously.