Git LFS check fails when pushing changes from Git submodules

Setup a Git submodule repository as explained here and push this to Bitbucket server.

Setup the restrict file size hook for that repository and select "Exclude LFS files" option.

Perform the following steps in the repo:

$ git checkout master
$ git checkout -b feature/aNewBranch
$ git submodule update --init
$ cd submoduleRefFolder
$ git fetch --all --prune --tags
$ git checkout refs/tags/<version> (or commitId or branchName)
$ cd ../
$ git push -u origin feature/aNewBranch

The push fails with the following in the logs: