Depends. At this point, Law seems to think he has a poor survival rate. As such, it may imply the following.
1. His personal alliance is done... Because he'll be dead, but his crew may work with Luffy.
2. It's over because he thinks he's going to die.
3. It's a ploy hoping to make Doflamingo focus on Law... Remember he mentioned that Luffy and Co. Need more time.
4. Any combination of the above.
Alternatively, assuming he really was just using the SH's...
1. A ploy to distract Doflamingo, and it means everything literally.
2. He used the crew, but lies about being ready to die... Thus plans to eliminate Luffy and Doflamingo simultaneously (hence sending Luffy in the heart of Dressrosa. Sending half the crew missing a lot of their best fighters to where his full crew is. It divide and conquers the SH's and they serve to destroy Doflamingo via Kaidou.
For the most part, I feel as though most of it is as follows...
He wanted to take Kaidou and team up; however, regardless of that success he wanted to make sure Doflamingo was shut down because of some unknown grudge. He places a personal problem before their goal. As such "unfortunately" his alliance ends.. because he is willing to die to ensure Doflamingo is done for, and he doesn't think he can beat Doflamingo.