From a former cabin crew's point of view, there are two issues here:
1. Waking the passengers up:
This is done for two reasons actually:
Safety reason: It is a good practice for the airlines to wake passengers up whenever possible, the real reason behind that is checking if the passenger is ok or not. Many cases of very sick passengers (incapacitated) were discovered this way. Sometimes the crew fails to wake up the passenger and call a doctor onboard, doctor comes and discovers something wrong and saves the passenger!. (I have personally experienced that). Sometimes dead passengers are discovered this way.
Furthermore, this practice is embedded in most airlines' safety policies.
Service reason: If the crew did not wake up the sleeping passengers at the time of the service, once the passengers wake up they will ask for a meal. This is not easy for many reasons, the meals can not be re-heated again (food poisoning risk) and most likely the crew will heat all of the meals for that service at once so no extra frozen meals available. The crew also can not use the meals from the second service before its time, also heating the meals takes from 20-30 minutes and there will be no time especially after the second service. So to save their selves from some problems, wake them up and ask them, that's the best for both crew and passengers.
2. Asking the passengers to put the seat in upright position:
Now this does not really make sense, most of the airlines interior manufacturers have solved this issue and not the space nor the position of the opened tray table is affected by the seat position (either upright of fully reclined) because tray tables are not originated from the seat itself, they are originated from the seat legs which are fixed and do not move. So reclining the seat will only makes the upper area smaller but does not actually move the table backward. I worked for years as cabin crew on different models and different interior designs and never seen this issue. Yes reclined seats can make it harder for you to enter the row because the upper are will be more narrow but for sure it will not affect the lower area where the tray table is. Many airlines do distribute a "Do Not Disturb" sticker in long-haul flights to people who wants to sleep undisturbed will stick it so crew will not wake them up during services. First and Business classes passengers do not have to worry about this because they usually have more space between rows and in-seat tray tables.
To answer your question, why do they do it in this airline, I really do not know and I can not know, but I am sure they have a good reason. Either they have a bad interior design or just some policy for a reason I am not aware of.
As you can see in the photo above, the tray table is attached to the seat leg which is fixed. Reclining the seat while the table is down will not affect the table position. Otherwise the table will also be tilted!