I have a Zooz Zen71 on/off 800LR switch I’ve installed and tried to follow the documentation on smart bulb mode, but when I turn on the light group in HA, then try to turn off the lights with the physical paddle the switch is unresponsive. I believe it still thinks the switch is “off” even when the lights are actually “on” I have to first up press for the switch to turn “on”(which does nothing since the lights are already on), then down press to turn “off” (which finally turns the lights off). I have an inovelli blue switch in a different room that I can turn on/off either digitally or remotely no matter where it was last turned on/off.
When you enable “smart bulb mode” on the ZEN71 you are disabling both Z-Wave and physical control of the switch, and enabling Central Scene events. When the physical switch is pressed it sends events to the hub (HA) for you to use to control the bulbs via an automation. What is the automation code you are using to control the bulbs?