Hue bulbs within phillips hue hub and ST hub

As @saosinx88 said, it is better to have the bulbs on the Bridge because they are unreliable repeaters when connected directly to the smart things hub.

And to answer your question, yes, when the hue dimmer is connected to the hue Bridge, it operates locally. :sunglasses:

FAQ: Do I need the Hue Bridge/Hub to Use a Hue Bulb with SmartThings?