I've fallen asleep with it in, too. No bad effects. An oil based lubricant may lessen absorption. I've wondered about obtaining a flexible dilator, just long or short enough to be flush with the vulva when inserted fully with tight knickers, allowing me to go about my daily business.
If I were purposefully dilating for 2 hours then I'd keep the dilator in for 30 minutes, remove for 1 minute, reinsert for another 30 minutes and keep repeating until 2 hours have transpired. The reason being would be to maintain a good blood flow, prevent it from becoming stale, within the stretched vaginal skin. I've actually felt myself becoming numb around the entrance after 30 minutes. And this has had me worried. To reduce this issue, I sometimes move the dilator around in circles/ellipses to 'massage' the vagina.