I recently bought 3 of the LZW42 color bulbs. I added them and used the default DTH they paired with (“RGBW Light”). I assumed this would let them run locally. Later on, I noticed a SmartLighting automation I added one of the bulbs to had moved to the cloud. That’s when I noticed the bulb itself was in the cloud.
We just spoke to SmartThings about this yesterday. At this time, no devices that use the “RGBW Light” device handler are local. They need to push this device handler to every hub via a firmware update in order for it to be local. The good news is that they mentioned it will be coming in the next couple of firmware updates.