Yes, you've got it right: the module does not switch the power directly, but recognises the press of the switch and sends a radio signal to the Hue Bridge to control compatible Philips Hue lamps. You cannot use it to switch any other LED lamps as it only works with the Philips Hue system. The lamp itself must be permanently supplied with power, which is achieved by diverting the phase with the Wago terminal.