The remote does have a button labelled as "Room temperature." I also have another display instrument which shows the current room temperature and humidity in the room. It is placed near the wall which receives sunlight after 3pm till 5 pm. When I switch on the ac at night, both the remote and the instrument show 30C. Also before switching off both read 25C so I am assuming remote has a sensor.
Well, in your case, you have a passive heat source(warm air from ceiling and staying close to the ceiling hence compressor works more hard). In my case, I barely have 1-2 inch space, just enough to remove the filters. Besides, I live on 4th floor out of 8, so no heat source. Also, laptop and a single human (me)are the only heat source at night.
I guess, the only logical explanation in my case would be as mentioned by
@Silent47Assassin ... a bit oversized AC for my room and the compressor trying to remain switched on rather than shutting down, eventually causing the AC to breach the set temperature.
My last night's experiment failed.. woke up in the middle of the night, my body chilled. Temps gone low to 25C(on remote and instrument) at 28C @40%TR. Increased my temperature from 27C @40% to 28C@40%. Seems like 28C is a more suitable option for me to play around if using at night.
Wished LG has a sleep mode similar to Hitachi. Increasing temps by 2 degree within an hour seems lame rather than an hourly increase as found in Hitachi.