Not enough load, non-neutral. Add bypass (or two).
In my case, there is a neutral line. Don’t know how much load is enough, but there 20.5W when the lights are on.
Wiring issue
Being a single pole installation, I’m not sure what the wiring issue could be even. There’s really not much in there at all, just a line, load, and a neutral. I will triple check it.
Switch detecting non-neutral when it is in neutral service.
If that’s true, why does it work in dimming mode, or when relay clicks are disabled?
Edit: I triple checked the wiring, and based on the response by @azreal, I checked the Line vs Load. Both were red in my box, and I didn’t bother checking which was which before since the switch is supposed to auto-sense. After confirming which was which and swapping them out, on/off mode works.
@kreene1987, it appears #2 WAS causing my issue, though I was either mislead by the Hardware Features and Capabilities post, or this is an auto-sense bug/limitation. I normally would verify these kinds of things. Thanks for challenging me, and Thanks @Azrael for posting your solution.
Edit: the switch does NOT autosense. This was an initial project goal that didn’t make it into production.