That’s very odd as I’m not getting any different healing whether I’m right next to the dummy or a long way from it. The only other Smite-related things I have are the smite-on-throwing-attack idol & Temporal Corruption. Perhaps Temporal Corruption removes the heal from Smite?
Just did a small test & without Temporal Corruption my hp went up to ~172 when standing right next to the dummy, so I’ll be posting that as a bug then as the passive makes no mention of removing the heal…