I couldn't find a source, but I once heard that your brain works normally in that state (as much as it can being drunk), it just doesn't form long-term memories

I couldn't find a source, but I once heard that your brain works normally in that state (as much as it can being drunk), it just doesn't form long-term memories. So during the night everything is as always and you remember what you did ten minutes ago, the events just never cross the "barrier" to be stored longer term. This explanation makes a lot of sense to me and would explain exactly this behavior. However, I'm not an expert on that topic so no idea if that's correct.