Do you remember if you clicked on the “Connect to SmartThings hub” button or the “Link Account” button. If you clicked on the latter, it would be Cloud execution as it would be using the cloud-to-cloud integration to Hue. Clicking on Connect to SmartThings hub would give you the local execution. I find the Add Screen for Philips hue to be slightly confusing at first.
For the sensor, you are using custom code for the Device Handler and that will always be cloud. It does not get loaded onto the hub.
There is an Edge Driver for the sensors you can try. Remove the sensor and then remove that custom code. Install the Edge driver and add your sensor back.