Whether he has sleep startle or not, whether he was awake as you thought or not, you could have hurt him when you picked him up which would cause him to snap. If it were me, I would think this was my fault and wouldn’t do it again. My dog will snap at me if I lean over him when he’s fuzzy from sleep, so it’s something I avoid doing. If I do it and he snaps, it’s my fault.
I also whole-heartedly agree that there is no value in locking him another room. I hope at least there was a bed in there for him to lie on.
In my naivety I also interpreted my dog’s roaching as an invitation to rub his belly. The result is that he doesn’t roach as much any more, which is something I regret, mainly because it makes me wonder if he doesn’t feel secure/safe enough to do it, but also because the sight of him roaching made me so happy. So yes, let sleeping dogs lie! It’s a saying for a reason!