With the latest beta update, 1Password now locks immediately when the display sleeps if an idle timeout is set and "Lock on sleep" is unchecked. I've attempted to toggle through all of the options, but the behavior remains:
1) Enable only "Lock after computer idle for ___ minutes"
2) Sleep the machine
Upon wake, 1Password is immediately locked.
1Password Version: Version 7.7.BETA-10 (70700010)
Extension Version: Not Provided
OS Version: OS X 10.15.7
Sync Type: 1password.com