Artifactory stores LFS blobs in a manner similar to the Git LFS client, using the provided sha256 checksum.
Git LFS blobs will be stored under a path such as <lfs_repo>/objects/ad/1b/ad1b8d6e1cafdf33e941a5de462ca7edfa8818a70c79feaf68e5ed53dec414c4
Where ad and 1b are the 1st and 2nd, and the 3rd and 4th characters in the blob's name respectively.
Git LFS behavior when download from the LFS endpoint fails
The Git LFS client will download the pointer file it created in your remote Git repository if downloading the blob from the LFS endpoint failed (i.e. wrong credentials, network error etc.).
This will cause the actual file in your local repo to be substituted with the pointer created by the LFS client with the same name and lead to any number of problems this behavior can cause.
This is a limitation of the LFS client tracked by issue 89.