Obviously you didn't know, else you wouldn't have discovered the hard way, or be asking now. You may be a pharmacist, but you're not a physician, and not an aviation medical examiner, so perhaps your opinion of what's "ridiculous" isn't the one that counts.

"It's okay, I'm a limo driver" only goes so far.

One cannot fly for 24 hours after taking Ambien. It is on the Do Not Fly medication list (Guide for Aviation Medical Examiners). https://www.faa.gov/ame_guide/pharm/sleepaids

Waiting periods after any medication depend on the dosage, and condition.

Ambien is not the same as xanax; neither its use, nor the effects of the drug, as you know. Further, the FAA looks at casual or chronic use associated with your condition, on an individual basis, and supporting documentation from your physician. Rest assured that chronic use of ambien will also result in a deferral.

Every case is decided on an individual basis, and the length of time a resolution is found normally comes back to how the individual handles their case. If you handle it yourself, plan on the maximum time (there isn't a time limit...but it will take the longest if you decide to self-help).

Deferral simply means that the local aviation medical examiner has passed your case up the food chain for a decision. Your case is best passed up the food chain with all the necessary paperwork in hand, which means you'd have to know in advance that you have a deferrable condition, and have worked with someone who handles special cases, who'd have advised you on the testing, documentation and certification requirements to be issued, or receive a special issuance in the event your condition falls outside the parameters of the regulation.

The chief concern is never the medication: it's the underlying condition for which the medication was taken. The effects of the medication are also important to consider, and the FAA does, but it chiefly concerned with the reason you're taking it. You can get off the medication, but that doesn't document the reason you took it, or the resolution of that matter, to the satisfaction of the FAA Administrator (and designated medical staff). If the patient is using sleep aids regularly, the AME must defer. https://www.faa.gov/ame_guide/media/DNI_DNF_tables.pdf

If you are off the medication for 60 days, and it's noted by your AME, and you have a favorable report from your treating physician that the condition for which you were prescribed is stable (stable mood), then you may be issued an unrestricted medical certificate. You indicated that you're self-medicating for sleep issues (also a concern), and stress. Several red flags, and no documentation.

The FAA places strict restrictions on psychotropic drugs, including SSRI's and psychiatric drugs, including xanax; in such cases, not only is the aviation medical examiner not allowed to issue, and must defer, but the physicians at Oklahoma City are typically not authorized, and the case is deferred to the FAA office in Washington DC.

For those who elect to pursue the matter on their own, it becomes a guessing game for what more the FAA requires and the FAA will not counsel you on the matter. If your documentation is insufficient or lacking, the case will get kicked back to you, pending more information...over and over. You're far better working through a service that does this professionally. I have used, and recommend Aviation Medicine Advisory Service (AMAS); it's oft-recommended by posters here. You'll start with an initial consultation either by phone or by email (with an associated fee), and then a recommendation for your case. If it's something AMAS will take on and can assist, then you'll be given the next step, with is a retaining fee and an appointment. They're very busy, the appointments very brief and they leave it to you to do the leg work. They advise, collect what you provide them, and submit to the FAA with their letter. It's the shortest path to getting your certification.