It actually works. In the attached example I have an asset with three lods. in the proxy lod I active lodify setting the other two lod. In the scene file I link the proxy object, I make it local (only object) and everything works without any mesh being loaded into the scene (all linked).
if you have to send your file to a render farm it’s better to enable the lod system in the lod0 object, so without the addon it will work just the same.