The RGB flashing is the switch rebooting when the bulb is powering off. This is occurring because the switch isn’t getting sufficient power from the non-neutral configuration. From your description, you are probably right on the edge of the minimum power requirements, and that drops during powering off.
This has been experience by a few here in the past. If my memory serves me correctly, some have resolved it by adding a 2nd bypass but others not.
You can test by temporarily swapping in an incandescent bulb. If that works properly, then it’s the power issue I described above. The power requirements for a LZW31-SN in a non-neutral configuration is a minimum 25W. Unfortunately, a most (if not all) Hue bulbs draw less than that. Maybe try a Hue bulb that draws more than the one you have presently installed.