Eight months is a motor milestone explosion. Your baby is crawling (or commando crawling), pulling to stand, possibly cruising along furniture, and developing the pincer grasp (thumb and forefinger). Their brain is processing an enormous amount of new spatial and motor information — and sleep is when that processing happens.
Separation anxiety reaches its peak around 8 to 9 months. Your baby now has full object permanence and understands that you continue to exist when you leave. This creates a new form of bedtime distress: they're not just uncomfortable, they're emotionally missing you. This is a sign of healthy, secure attachment — even though it doesn't feel like a positive development at 2 AM.
Cognitively, your baby is beginning to understand cause and effect (I drop the spoon, you pick it up — fun!), responding to simple words ("no," their name, "mama/dada"), and showing early problem-solving skills. All of this cognitive work gets consolidated during sleep, which makes sleep itself more active and sometimes more disrupted.