It is the strangest thing, I haven't seen anything else online about this. My grandfather has Alzheimer's, delusions, hallucinations, the works. Yet when he gets some idea or worry in his mind, he will not forget it, and he cannot be distracted. He will stay up for over 48 hours sometimes in this state. He was so sharp when his mind was whole, and now it seems to be backfiring.
Medication can work well for some & is worth checking out.
So many folks with AD were brilliant professionals before AD took over, that's a common thread too. When I worked in a Memory Care Assisted Living residence, it was filled with former doctors, high powered lawyers, engineers, professors, etc. Nobody's immune from the dementias, unfortunately.
I hope you can get your grandfather some help with the anxiety that's keeping him up at night. AD can create such difficulties for all involved, I know, which is why I hate the dementias with all my heart. I watched my mother battle for years with it before she passed in February. Best of luck
Seroquel worked wonders for my mom. These times when she would just get stuck on something were usually with her sundowning.