I have a 4 way switch setup with LZW31 (black dimmer) and dumb switches, my setup matches this wiring diagram with line/load in the same box with neutral.
The switch powers 6 LED lights, 9W each, so shouldn’t be a low wattage problem.
Also in hubitat I’ve configured the switch to use neutral wire (param21) and 3 way toggle (param22).
From what I can see + your labeling, the wiring looks correct.
Presuming the wiring is correct, that leaves either the load or the switch as the problem. So, a couple suggestions:
If you can get at the lights, temporarily throw in an incandescent or two to see if that changes the behavior
Temporarily re-wire this as a 2-way neutral removing the 3-wire from the Inovelli. If you try it BEFORE you reset parameter 22 that would perhaps suggest that 22 wasn’t set correctly. (Not absolutely sure about this.) In any event, get it working as a 2-way to confirm switch and load are OK. You seem pretty familiar with what you have so this shouldn’t take long.
My long running suspicion has been that the switch parameters 21/22 do not always get set properly, despite indications to the contrary. So once you put it back to a 3-way, try resetting the parameters to the proper settings. Try at switch vs hub. Try improperly setting the parameters and then putting back, etc.
Still in a 2 way wiring, if I change settings to a “3 way toggle” setting, lights are always on. Dimming and turning off switch has no effect, similar behavior as my initial 4-way wiring.
Still in a 2 way wiring, If I change it to “no neutral” and “3 way toggle”, switch and dimming works again.
Back in 4-way wiring, tried “no neutral” and “3 way toggle”, but it changes which states of dumb switch the smart switch doesn’t work in. But dimming now works.
I tried replacing the dimmer with another inovelli dimmer I had from the same batch and the replacement worked. I then traced the problem down to the firmware update. Apparently I had missed the target 1 firmware update for the dimmer. After updating target 1, it works fine now.