Hey, I would need to test your scenario later.
I have working dynamic icons for Switch items + Text elements and Dimmer items + Slider elements in my setup.
I’m using icons from the classic icon set as well as my own icons.
I would need to build an example with a Number or Switch item.
What I can see at first glance:
you never mention the icon “smoke”
if you are on OH2 (I believe so as you mention the REST interface) you are placing your icons in the wrong folder. They need to go into <oh-config>/icons/classic/.
Please also try with provided icons like qualityofservice
I can’t help with openHAB 1.8. In openHAB 2.0 a problem with dynamic icons was solved a few months back. Maybe you should think about switching before investing more time in your old setup.