Some healthcare providers are reluctant to use melatonin because potential suppression of endogenous production and/or the theoretical potential for pineal gland atrophy.
So far, I have only come across one rather old study reporting possible suppression of endogenous melatonin in two subjects after twelve weeks ( https://www.ncbi.nlm.nih.gov/pubmed/9378688 ).
The most recent systematic review found little to no evidence for adverse events associated with melatonin ( https://www.ncbi.nlm.nih.gov/pubmed/31722088 ) and a 2018 study reported recovery to normal circadian melatonin rhythms within three days after discontinuation of exogenous melatonin supplementation in two subjects ( https://ncbi.nlm.nih.gov/pubmed/30663964 ).
All in all, I would say evidence on the topic is mixed and very scarce. In my patients, I have never witnessed any kind of withdrawal after melatonin discontinuation. However, this might be influenced by the German guidelines, which prohibit the prescription of melatonin for more than 3 months.