Always on display not working - green blink instead

[AC Question]

Suddenly my phone stopped showing always on clock.

At the same time I noticed that when I lock or unlock my phone top of the screen blinks in green light. When I disable always on display the blink appears only when I unlock the phone . Also screen blinks when I restart the phone and it starts loading.

I wonder if this is hardware problem or factory reset and future software updates might help?

Thanks