Do we have to enable Git's LFS (Large Files Support) setting to support ISX files?

No - you don't need to enable Git LFS.

MettleCI deliberately excludes binaries in its ISX exports to keep file sizes to a minimum. MettleCI also compiles assets, from source code, in their destination environment(s) as a mechanism for maintaining 'environmental hygiene', although this is configurable if you object to this approach.