Just want to double check after re-reading the OP. The currently installed Inovelli switch is the LZW31-SN dimmer right? I only ask since you mentioned swapping in an on/off which I believe require neutral wires?
It sounds like you’re running into a similar issue seen - here and here where the smart bulb mode + no neutral combination seems to result in the dimmer not getting enough power and causes the looping behavior.
If you disable smart bulb mode, does the switch work to turn on/off the bulbs? (I know that’s not where we’d want to leave this, just trying to rule things in/out)