It comes down to security settings. I just bought 10 new bulbs. Hubitat normally pairs them S0. This is a horrible design. This is causing so many problems on my system, where my z-wave comes to a screeching halt. I have bulbs in groups of 3-5. Activating a group lags the system horribly to where you cannot turn a group on and off 3 times in a row-----ever. So I just found out about pairing them non secured by the 3 on/off method. This has worked with only one bulb so far, and none of the others. Ive spent 3 hours now including and excluding and every time it comes into the system S0. Of course half of the time during exclusion it doesnt works so have to spend extra time getting rid of the ghosts. Every other device I have on inclusion into the system gives me the option to Skip secure inclusion, even my Inovelli red switches, but not these damn bulbs. Im so frustrated, there has got to be a better way. I have zero need for security, I just want the bulbs in my system with security=none. Please help.
Well, after about 20 tries, I got them all paired non secure. This seems to have fixed the severe lag in my system. If any developers read this, this is something that needs better clarification and/or a different inclusion to where you can opt out of security. Including these with a setting of S0 is sure to cause nothing but problems.
This popup only happens with S2-capable devices (which the switches and dimmers are). The bulbs are S0-only. Even with S0-only devices, you often have a different on-device pairing method for requesting secue vs. non-secue inclusion, but that wasn’t added to the bulbs until recently, and the sequence is appaently tricky to get quite right. So, as you’ve noted, a lot of times you might end up with S0 when you wanted none. This is, indeed, unfortunate. If they keep these bulbs in their lineup, hopefully they’ll add S2 to make this easier for everyone; otherwise, it might have been nice to make non-secure inclusion the easier process. The other half of this issue is that Silcon Labs’ official Z-Wave 700-series SDK that Hubitat is using (on the C-7) hub doesn’t give you a choice for S0-only devices in this case like it does fo S2. It might be nice if they changed that, too, but that’s probably the least likely outcome IMHO.
In my experience, a secondary controller is really handy to have in this situation. Pretty much any of the Z-Wave USB sticks out there would work (Zooz, HomeSeer, Aeon, ZWaveMe, etc.). A Windows PC running Z-Wave PC Controller (available from Silicon Labs’ Simplicity Studio) is the most common way I’ve seen this work; joining it as a secondary to your hub, then doing inclusion via PC Controller instead of the hub (you will get a choice, or if you join the stick without security in the first place, it won’t matter), is a way to avoid the S0 issues. As a bonus, this is also handy for firmwae updates. 
(Yes, those should work from the hub, but most people have better luck this way, it seems.)
Thank you for the lengthy and informative reply. I’ve been a smart home user for years, first Vivint, then switched to Hubitat C5 2 years ago, now switched to Hubitat C7 last weekend over the Thanksgiving day holiday. Today is the best my system has ever performed. I still have 6 S0 devices, my 3 GoControl garage door openers and my 3 Kwickset 910 deadbolt locks. I didn’t think at the time when I paired them, but I may see if they support S2 or none and get them away from the S0. My Inovelli Red switches and Zwave bulbs were HUGE issues that I think are finally fixed, from updating the switch driver and firmwares, to getting these bulbs added in with no security. I may try to do an association which is why I started down this path, but the system is running so good it may not be necessary anymore. I still keep my C5 hub as my testing and updating hub, which I had to use to update the switch firmwares. So far so good.
I had a similar problem. It was a combination of the S0 security and an overly chatty zooz Zen25 Double plug. Got rid of the double plugs, updated the firmware on the bulbs (2.31), and reincluded non-secure, they have been rock solid for close to a year now. A few weeks ago I attempted to reinclude those Zen25’s after all the recommended tweaks to disable energy monitoring and updating the firmware. within 72 the Zwave was starting to fail. took those Zen25’s out, the problem quickly corrected itself. The moral of the story, the bulbs are fine, but stay away from those Zen25’s, at least with the C7 hubs.