Magnetic transformer experience
I recently installed 32 of these PD-5NE dimmers in my house as part of an all-Caseta makeover. Two of the 32 circuits had magnetic transformers (one 10 years old and one brand new) and I experienced exactly this failure on both circuits. Thinking I maybe had DOA dimmers, I tried a second dimmer on one of the circuits and it worked. Emboldened, I tried a second dimmer on the other circuit but it failed. I'm not sure if I did anything differently when swapping in those second dimmers but I think I may have been quicker to set the dimmer phase to the MLV setting on the one that worked. Anyway, now I had 3 dead dimmers. I contacted Lutron customer support (chat) and they recommended PD-10NXD for use with magnetic transformers. I have standardized on all-PD5NE's which match the user-experience of the Pico's so I asked to speak with someone who could explain why the PD-5NE's weren't working, since all the chat agent could suggest was looking at Lutron's LED compatibility website (which offered no insight). They referred me to Technical Support. I don't recall if I even tried to engage with them about the transformer issue but they readily agreed to a warranty replacement of the 3 dead dimmers. When I got the replacements, I swapped one onto the circuit with the magnetic dimmer and quickly set its phase and it worked. At that point, I was all set and started integrating the bridges with my two SmartThings hubs.
I discovered, belatedly, that Lutron's integration with SmartThings only supports one hub (sigh) so I wound up swapping my hubs for the PRO models and going down the path of a custom integration that supports multiple hubs. In the course of doing that, I had to delete devices from one hub and re-install them on the new one. That action was straightforward for everything except the one dimmer still on a magnetic transformer. Perhaps in the course of deleting and re-installing it, it forgot what phase it was supposed to be on because I found it failed in the same way again. Rather than hassle with this further, I'll replace the magnetic transformer with an ELV one so I can get off this crazy merry-go-round.
I think Lutron should update its product materials to indicate that PD-5NE is not suitable for use with magnetic transformers, despite its phase-settability.