Apparently, git-lfs as provisioned by lsstsw does not behave as documented in our developer guide because it is too old. Specifically, heather999 reports on GitHub:
Currently, bin/deploy installs git-lfs 1.0.2. This is rather old and does not include the more recent feature modification which is referenced in the DM Doc, namely "git lfs install":
Further it seems the current DM configuration instructions do not work at all for git-lfs 1.0.2. Once I upgraded to 1.2.0 things were working in accordance to the DM documentation.
Would it be possible to upgrade the version of git-lfs that ./bin/deploy installs so others do not run into similar problems?