To follow up - I have AOD set to always be on for my S10 and S9.
With both laying on the table in front of me, covering up the proximity sensor for both doesnt turn off AOD on either.
The problem I was having with my S10 was with AOD or tap to wake on (or even if the power button would get hit in my pocket) and with the phone in a pocket, the screen would wake and the S10 would accept input. In that same scenario, my S9 would keep the screen dim and give a message that says "accidental touch protection" and then give some messaging that "your phone is being protected from accidental touches".
Post the update today, my S10 behaves in exactly the same way as my S9.