Article 501.15(A)(4) states:
"In each conduit run leaving a Class I, Division 1 location. The sealing fitting shall be permitted on either side of the boundary of such location within 3.05m (10ft) of the boundary and shall be designed and installed so as to minimize the amount of gas or vapor within the Division 1 portion of the conduit from being communicated to the conduit beyond the seal. Except for listed explosionproof reducers at the conduit seal, there shall be no union, coupling, box, or fitting between the conduit seal and the point at which the conduit leaves the Dicision 1 location."
So, to answer your question, you are correct. The LB fitting is not permitted to be between the Division 1 boundary and the conduit seal. Also, it is 10 feet, not 12".