I have the LZW31-SN Dimmer - Red Series (Gen 2). The behavior of this dimmer is confusing to me. It’s so close to being perfect and then missed the mark right at the end. I got these because they seem to be perfect for working with my smart lights. I am struggling so maybe someone can help. I have Hue Smart Lights with smart things hub. I have the switch set to smart, Local & remote control are enabled. Dimming speed is set to 0. I am mirroring this switch with the Hue lights in the smart automation. So with this setup I can dim the lights by holding up/down on the switch and have the indicator bar level up and down and stay in sync with the lights dim level. This visual queue on the light indicator is handy as there is a slight delay in dimming. No scenes are required for this to work. It’s perfect. Right up until you shut the lights off. It cuts the power to them. Not what I want. I am assuming the mirror I have set up is allowing me to dim with scene like commands. I tried disabling local remote control and setting scenes for dimming this works ok but I lose the indicator light leveling up or down with dim level. That’s a deal-breaker. Is there any way I can control my smart lights, dim them, keep them from getting power cut (without bypassing load wire) & have the led indicator light on the switch stay in sync with the dim levels of the smart lights?
I don’t use Hue bulbs, but I think you are trying to implement outside of design.
With smart bulbs and a dimmer, you should have the Smart Bulb Mode turned on, as well as local control disabled. This insures that the bulb is always fully powered AND you can’t physically cut the power to the bulb via the switch.
So now you have to rely on the switch to send commands to the hub to affect the dimming. If these were Zwave bulbs (which they’re not) you could do that with direct association. Otherwise you’d have to rely upon scenes.
It sounds like you are using the physical dimmer to control the dim level, which isn’t how this is typically implemented. I don’t have a solution as I don’t use Hues, but hopefully someone here has a suggestion for you.
Just seeing this now and have a similar setup myself, so replying in case anyone finds this helpful. 
I know this post is a few weeks old by now…
Short answer: no. 
I think they are contemplating an “enhanced smart bulb mode” where the device will still internally track the dimmer level without actually modifying the load, so you could get the LED bar to do what you want and also have the value reported to the hub if it’s of any use there. But the current production or beta firmware files do not have this feature (yet?).
Longer answer: the above is correct — and if you’re currently modifying the dimmer level with Hue bulbs, I’d encourage you to not do so, as they are not meant to be “physically” dimmed and might be damaged by this. The correct way is “soft” dimming, i.e., via ST’s Hue SmartApp, the Hue app, a TouchLinked remote device, or other integration. For the time being, you’ll have to leave the dimmer at 100% (technically Z-Wave level 99, so you might also see that some places) and use the “scene” (button on SmartThings) events to modify the Hue bulbs. For example, you could map “button 1 pushed” (a single tap up) to turn on the lights, “button 1 held” (a single tap down … odd naming to get all these exposed in ST’s button model) to turn them off, and something else to raise/lower the levels or set color/CT.
Even longer answer: you can cheat around the first problem if you really want to by wiring the switch “incorrectly,” i.e., with line wired to load (either on the dimmer or before you get to the dimmer itself at all, though I’m not sure how well this would work in no-neutral setups). This may be against code in your area or a bad idea regardless (notably: the air gap will not work), but it would eliminate any possibility for the dimmer to actually modify your load electrically, so you could then automate with the dimmer as you see fit.
Personally, I just keep my dimmer at 100% and deal with the rest. The lack of LED indicator for level doesn’t bother me — I can see the actual lights and get an idea of when they’re at the level I want. But your feature request has come up before, and it looks like they are figuring out if they can make this work. But for now…