A character who sleeps in medium or heavy armor is automatically fatigued the next day. He takes a –2 penalty on Str and Dex and can't charge or run. Sleeping in light armor does not cause fatigue.
With mithral, you treat armour as "one category lighter than normal for purposes of movement and other limitations." Would these "other limitations" include the penalty for sleeping in medium armour?
Best Answer
Although it is not phrased explicitly as a "limitation", I think it is reasonable that the fatigue penalties are waived for sleeping in medium Mithral armour.
A few class abilities only work if character is wearing Light or no armour. These seem to be clearly "limitations" and definitely waived for a Mithral Breastplate.
I have generally counted the fatigue rule for sleeping in armour along with the skill and class abilities that are only allowed in Light or no armour.
It is a rare situational bonus anyway - an ambush against sleeping PCs, and preventing their use of armour might be a possibility, but if it is a common threat in an adventure, the players will figure out ways to to avoid it as much as they can.