Q: Wiring up a dimmer switch to an old house

EDIT: fucking switch doesnt fit in the wall coz of the control box so brb

TLDR: is a Neutral wire in a "live + neutral + ground" setup the load output wire or a neutral wire when doing light switches?

My house is ca. 1907 for context, and the only wires I've got are:

1. Red (Live), tested with multimeter.
2. Grey (Neutral..?), was connected to common terminal of old (traditional) switch
3. Exposed (Ground?) Connected to terminal housing.

My new dimmer supports "with or without neutral" circuits:

but what confuses me is how the 2nd wire is a neutral line, but clearly is being used as common; should this be connected as neutral, or do I have a "no neutral" circuit setup?

I've got some old wiring from the cellar to demonstrate what I think is correct, including some ground wire taped up to connect the L+N terminals as the circuit describes: