I can tell you it does not have the death connotation at all in Portuguese, which is also a latin language.

In fact in Portuguese "rest in peace" would be an absolutelly normal thing to say if for example somebody had mentioned their neighbhours are noisy and they were going for a rest (though a more general wishing for a good rest to others, would be something that translates to "rest well" rather than "rest in peace" and specifically for people going to sleep it would be "sleep well").

This is maybe because the word by word translation of "in peace" in Portuguese has a double meaning, of both "in peace" and "peacefully" depending on context, since the language has no specific word for "peacefully", so people might say what is word by word "rest in peace" whilst meaning "rest peacefully".

It would thus be understandable for a native portuguese speaker whose domain of the english language is still at a mid level (were they tend to translate things word by word) to in the right context (to somebody who has complained that his or her rest or sleep tends to be disturbed by outside factors) to wish somebody going to sleep using the English language words "rest in peace", totally oblivious to how his or her word by word translation from the Portuguese carries a whole different meaning in English.