When repository is cloned to a folder containing { } (e.g. c:{folder}) git lfs commands does not work.
E.g.
C:\SnapVolumesTemp2{folder}\TestRepo>git lfs track
Error: The system cannot find the path specified.
This operation must be run in a work tree.

The command git rev-parse --show-toplevel --absolute-git-dir returns following:
C:/SnapVolumesTemp2/{folder}/TestRepo
C:/SnapVolumesTemp2/{folder}/TestRepo/.git

This same repository works fine when cloned to a folder without {}

System environment:
git --version
git version 2.37.2.windows.2
git lfs --version
git-lfs/3.2.0 (GitHub; windows amd64; go 1.18.2)
OS:
Windows 10 Enterprise LTSC 1809

Output of git lfs env:

C:\SnapVolumesTemp2{folder}\TestRepo>git lfs env
git-lfs/3.2.0 (GitHub; windows amd64; go 1.18.2)
git version 2.37.2.windows.2

Error: The system cannot find the path specified.
Endpoint=https://(I have deleted the endpoint for security reasons)/TestRepo.git/info/lfs (auth=none)
LocalWorkingDir=
LocalGitDir=C:\SnapVolumesTemp2{folder}\TestRepo.git
LocalGitStorageDir=C:\SnapVolumesTemp2{folder}\TestRepo.git
LocalMediaDir=C:\SnapVolumesTemp2{folder}\TestRepo.git\lfs\objects
LocalReferenceDirs=
TempDir=C:\SnapVolumesTemp2{folder}\TestRepo.git\lfs\tmp
ConcurrentTransfers=8
TusTransfers=false
BasicTransfersOnly=false
SkipDownloadErrors=false
FetchRecentAlways=false
FetchRecentRefsDays=7
FetchRecentCommitsDays=0
FetchRecentRefsIncludeRemotes=true
PruneOffsetDays=3
PruneVerifyRemoteAlways=false
PruneRemoteName=origin
LfsStorageDir=C:\SnapVolumesTemp2{folder}\TestRepo.git\lfs
AccessDownload=none
AccessUpload=none
DownloadTransfers=basic,lfs-standalone-file,ssh
UploadTransfers=basic,lfs-standalone-file,ssh
GIT_EXEC_PA