Yep, I’m using the MOSFET basically as a linear regulator, so significant heat is generated.
Yes, you understood correctly. 10W is a lot, but the efficiency isn’t so bad when you consider the total power at that level, which is ~50W.
There are basically 3 methods we use to control the brightness: linear (like this mod), PWM (like a traditional FET driver), and voltage conversion via switching (e.g. buck or boost driver). Ideally a buck or boost driver is most efficient, but in practice they can be 80-95% efficient, and high power examples are not readily available for our lights. Comparing linear and PWM is interesting. One might think at first that PWM could be more efficient since the driver does not dissipate heat like the linear method, but it turns out the power consumption is the same for both methods. The PWM driver doesn’t dissipate heat, but extra power is dissipated in the circuit resistances and the LED itself. See here for some analysis I did recently.