Just this past week, git lfs was throwing smudge errors for me. Not really sure what the issue was, I followed the recommendations to disable, pull, and re-enable. And got them again. So I disabled. And left it disabled.
Not a solution.
This said, the whole git-lfs bit feels like a (bad) afterthought the way its implemented. I'd love to see some significant reduction of complexity (you shouldn't need to do 'git lfs enable', it should be done automatically), and increases in resiliency (sharding into FEC'ed blocks with distributed checksums, etc.) so we don't have to deal with 'bad' files.
I was a fan of mercurial before I switched to git ... it was IMO an easier/better system at the time (early 2010s). Not likely to switch now though.
I would say that if you care about good LFS support, that is a sufficient reason to use Mercurial. Harder to find Mercurial hosting these days, though, but I'm not worried that the Mercurial project will die off (since both Facebook and Google use it, in some manner).