I have used LOD 2 on all versions of SE without issue
I never said that it would cause issues, necessarily (though it can), just that it could not be used effectively since when flying around over a planetary surface it would never stop loading unless you stopped moving for an extended period of time, and loading generally decreases framerate by a factor of 2 or 3. That's why I said that. In effect, while moving you would not load terrain to any greater level of detail than LOD 0 or 1 much of the time, so there'd be little point in doing it. And of course, SE generally encounters problems after using a lot of memory, and nothing uses memory faster than flying around on a planet using LOD 2.
I can use LOD 2 with no performance loss
I'm not sure how that's possible unless you're just incredibly lucky.