What is this diode bridge used for in this circuit?
While the DALI bus has DC power on it, the wiring topology is not polarity-sensitive.  That is, either wire can go on either pin of any DALI interface connector.  From the Wikipedia page:

"Each device has a bridge rectifier on its input so it is polarity-insensitive."

https://en.wikipedia.org/wiki/Digital_Addressable_Lighting_Interface#Technical_overview