Some of my rules differ depending on whether the activation type is physical or digital. When using an Eaton dimmer switch with the built-in driver ("Eaton Dimmer") in some cases digital activation is reported as physical, which breaks the rules. I tracked it down to scene activations causing the problem - when the dimmer is changed via scene activation the events are reported as physical instead of digital for some reason.
My guess is that this has something to do with the setLevel() and on() commands being sent in such quick succession, as show in your logs. Many (most? all, unless they do it via a different mechanism entirely? I don't know...) Z-Wave devices don't actually report anything different for phyiscal vs. digitial "on" reports that get sent back to the hub after the device turns on, and in such cases it's the Hubitat driver tracking some things internally to make a best guess. I'm thinking these commands being sent only a few hundred millseconds apart might be messing that up somehow. This could be something the driver author could look into, but if there isn't a way to solve it given how the best-guess-type is tracked, then you might be stuck with this behavior.
Two questions, however, come to mind:
Why is on() being called at all? The device should turn on with a setLevel() alone, and I see that you don't have "Enable discrete on for activation" enabled in the Scene, which is the only thing I can think of that should cause this to happen--unless you have another rule/app calling on() on this device for some reason. (I wasn't able to replicate this with a simple scene I created to test this, but perhaps it's some combination of your settings--but likely something else.)
I'm not familiar with this particular device, but does it send anything else for physical events? Lots of "modern" Z-Wave switches and dimmers will use Z-Wave Central Scenes for physical taps/holds/releases (of the paddle/switch itself), and those could be used instead of looking at the switch attribute/event on Hubitat if you only care about physical events. (These normally get translated into button events like "pushed" on Hubitat.)
Thanks for the reply. The commands are generated by the scene activation, so there's not a lot under user control there. There's no other app sending an on, so that can be eliminated.
I was able to workaround the issue by using the community "Any Z-Wave Dimmer Driver" by jvm, which works well and does the correct reporting. Given that, it looks like a problem with the Hubitat native driver.
