Dimming Hue bulbs only works when configured as On/Off with Zigbee bindings

I just installed my first Blue 2-1 and had some issues getting it to work to dim some Philips Hue bulbs. I eventually got it working, but don’t quite understand how the configuration change made it work.

I’ll share (what I remember) from the initial setup and where I ended up.

I got the switch and three Hue bulbs installed and then did the setup step where you hold the config button and press the paddle to put it in smart bulb mode. I paired everything with Home Assistant and followed the instructions for binding to a group of bulbs. Once completed, the switch turned the bulbs on and off. (I was also able to add some automations to activate scenes that I wanted.)

Dimming didn’t work at this point.

After some research, I found the documentation for configuration of the switch, specifically #258 Switch Mode (Dimmer or On/Off). I expected that I would find this was still set to 0 indicating On/Off. It was, however, set to 1. Eventually, taking a stab in the dark, I set it to 0, and then the switch started to be able to dim the bulbs.

In Home Assistant, I now have:

Cluster: Inovelli_VZM31SN_Cluster (Endpoint id: 1, ld: 0xfc31, Type: in)
Attribute: output _mode (id: 0x0102)
Value: Bool.false

Is this how it’s supposed to be set up? What am I missing that’s making this confusing to understand?