Pretty sure it doesn't apply to the sledge.
<requirement name="HoldingItemHasTags" tags="perkStayDown"/>
Sledge does not have the PerkStayDown tag.
<item name="meleeToolSledgehammer">
<property name="Tags" value="blunt,melee,heavy,sledge,weapon,meleeWeapon,perkHeavyMetal"/>
For comparason this is the iron club's Tags
<item name="meleeClubIron">
<property name="Tags" value="blunt,club,clubIron,melee,light,weapon,meleeWeapon,perkStayDown"/>