I’d say “under no circumstances”. When building for production, you want to build on a stable foundation. LFS isn’t that, it’s an educational tool. It does not result in a maintainable, robust system. It requires tremendous amounts of work to keep it secure and updated: there’s no package manager, no repository you can pull from, no nothing. You have to build an entire distribution on your own. Outside of educational purposes, I’m having trouble to imagine any situation where that might be a good idea.
No, not even embedded. There were always distros targetting embedded systems, LFS was never a good choice there either. It was much more straightforward to strip down - say - Debian for a limited device, than to build something from scratch for it. (I spent a few years building and operating embedded Linux systems at the early 2000s, we built it on a stripped down Debian.)
If they have no desire to maintain/sysadmin their own linux systems, then the best distro to recommend is whatever you can help them with, and possibly even maintain for them.
Case in point, my Wife is a very happy NixOS user, despite knowing absolutely nothing about Linux. Yet, she’s on a distribution that’s as far from being newbie friendly as a distro can possibly be. She’s still happy with it, because I set it up for her, and I maintain it for her, she never has to install, upgrade or configure anything, ever.