I don't think its a bug. I mean, sure, the perk descriptions are misleading and should probably be corrected. But if Sandman worked like you suggested, it would be next to useless. The effect would need to be vastly amplified.

As things are, it is a very valuable perk.

Sandman is hella fun, I kill a bunch of people while they're sleeping in the Institute, RR, and BoS without aggro anyone.

I can't sm kill any sleeping enemies. There's a respawning gunner in the truck at S. Boston Checkpoint. Not an option. Oh well, here's a live frag grenade for you. Enjoy that instead whilst I ponder the ramifications of me not being able to SM kill you.

Thank you for clarifying this.

I killed a Deathclaw instantly who was sleeping using this perk, very useful in my opinion.

Not sure about all the math, but my Silenced weapons do x5.4 sneak attack dmg, while my non-silenced ones do x4.2. According to the screen when I do the attack.

My silenced guns do 5.3X damage with both these perks. Add that with a Gauss Rifle that does 25% bonus and...yea...

Is Sandman adding unnecessary overkill to an already overkill sneak build? Yes. Is it ludicrously fun anyway? Yes.

I use Sandman as icing on a stealth build. It's not worth taking a low levels. You need Gun Nut 3 to unlock suppressor building anyway so I usually don't bother with it until I get Gun Nut 3.