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New to Z-Wave. I have a switch that controls four lights - two recessed and two sconces. I'd like to control the sconces and recessed lights separately. I saw the Aeotec Nano Dimmer, but I think one of these in line would cause the lights downstream to be dimmed (since it's eliminating/reducing power to the hot?). Is this correct? If so, any ideas on solution here (not smart bulbs).

Fibaro Double relay switch or any other double switch should do the job for you. That in case you don't need to dim them, just On/Off. But you need neutral wire in order to connect them.