Now comparing NJ and LS is superfluous.
However LS did have the initiative.
It was directly run by Hybe (So Sungjin, the ex owner of Source, has no say on how LS is run) and was a favorite of Mr. Bang.
However, the Garam incident totally ruined LS's debut, and now LS has 5 members, same as NJ, and NJ's fandom is bigger.
So, despite of having an actual American member, LS did not get to perform in USA before NJ, which has no American members.
Granted, LS was formed to appeal to the Asian market and NJ to markets not covered by LS, but NJ also appeared in a Japanese show, showing if NJ feels like it will take LS's share in Japan as well.
Without the Garam incident and the loss of initiative, I think LS would have been able to stage a good fight against NJ, giving BaeMon a chance.
But now NJ has sailed past everyone, which is making YG delay the debut of BM again and again and again.
YG probably planned to see a deadly struggle between the two Hybe divisions, but the garam incident ended any possibility of such fight being viable.
When blackpink debuted, twice was fighting gfried and ioi, giving a chance to a new act. However NJ is now not fighting anyone, other than potentially BTS (and Min Heejin is now working with Taehyung), since the battles are over.
The Garam incident, whatever the merits were, proved to be decisive for the fight of LS against NJ in my opinion.