Both switches have the same settings in ST and are the same firmware (1.48).
Switch 1 is in a gang that controls a bathroom light fixture with Hue bulbs in them. With this switch, with Smart Bulb Mode on, there is no way for me to turn off the bulbs or anything and this is the behavior I want. When I press down on the paddle, the switch LED turns off. When I hold down the paddle, the switch LED slides down as if it were dimming a light. However, the smart lights are unaffected.
Switch 2 is in a gang that controls a switched outlet and I have a lighted air freshener in there to test its power. With the same settings, if I press down on the paddle, the outlet turns off and the switch LED turns off. If I hold down the paddle, the outlet is unaffected and the switch LED slides down.