So in summary, you removed the old rotary Lutron dimmer (which worked fine?)
Replace it with an Inovelli Black wired essentially the same way and not the inovelli is not working correctly.
Unfortunately I’ve not run into this issue, however the forum has a person with a similar issue here.
If you change the position of the dumb switch does it work the same?
Is it easy for you to change the LED bulbs (just for a test) the best would be some old incandescent bulbs.
John