That's a basic explanation on how Livewire works.
1 - It initialize the component with the values that you get from the back-end.
2 - Whenever you do any changes on the front-end, it sends request to back-end with that changes.
3 - The back-end should return the updated component template as a response.
4 - Livewire on the front-end updated the parts that changes on the template, and only the parts that changes. That why you don't see it blinking.
Back to your question, when your are using dump or anything like it, it changes the response that Livewire expects on the front-end. So it doesn't know who to interact with it, and it stops working as it should be.