Because lactose intolerance is an allergy, I don't see why it would be a side-effect.
To answer the second part of your question, Usually, the pyloric valve at the lower end of the stomach regulates the release of food into the bowel. When the Gastric Bypass patient eats a sugary food, the sugar passes rapidly into the bowel, where it gives rise to a physiological reaction called dumping syndrome. An affected person feels his heart beating rapidly and forcefully, breaks into a cold sweat, gets a feeling of butterflies in the stomach, and has a "sky is falling" type of anxiety. He/she usually has to lie down, and is very uncomfortable for about 30 to 45 minutes. Diarrhea may then follow.