Micelles are self-assembled aggregates of amphiphilic surfactant molecules that are important in a variety of applications, including drug delivery, detergency, and catalysis. It is known that the micellization process is driven by the same physiochemical forces that drive protein folding, aggregation, and biological membrane self-assembly. Nevertheless, the molecular details of how micelle stability changes in water at low temperature are not fully clear. We develop and use a coarse-grained model to investigate how the interplay between nonionic surfactants and the surrounding water at the nanoscale affects the stability of micelles at high and low temperatures. Simulations of preformed C12E5 micelles in explicit water at a range of temperatures reveal the existence of two distinct surfactant conformations within the micelle, a bent structure and an extended structure, the latter being more prevalent at low temperature. Favorable interactions of the surfactant with more ordered solvation water stabilizes the extended configuration, allowing nanoscale wetting of the dry, hydrophobic core of the micelle, leading to the micelle breaking. Taken together, our coarse-grained simulations unravel how energetic and structural changes of the surfactant and the surrounding water destabilize micelles at low temperature, which is a direct consequence of the weakened hydrophobicity. Our approach thus provides an effective mean for extracting the molecular-level changes during hydrophobicity-driven destabilization of molecular self-assembly, which is important in a wide range of fields, including biology, polymer science, and nanotechnology.