Two of the 3 incidents cited at the beginning of the Fodcom occurred during mountain flying approaches in breezy conditions, one an approach to a ridge line and the other an overfly of a peak. These are both situations where the wind strength and direction can change rapidly due to mechanical turbulence from the topography (and not just the immediate feature but others well upwind of it).
As the Fodcom states, a critical stage of flight is around the translational lift boundary - normally you accelerate or decelerate through this speed range in a progressive manner, adjusting the collective and pedals as the rotors gain or lose the benefits of ETL. In the mountains or anywhere in gusty wind conditions, the rotors can go from ETL to no ETL in the blink of an eye as the wind can change in both direction and speed.
The worst situation would be a sudden loss of ETL as the aircraft would descend and yaw right (for american rotation) so the pilot would instinctively raise the lever (especially if close to mountainous terrain. The TR was only producing enough thrust for the 'above ETL' condition and now suddenly there needs to be enough pedal input to compensate for both the loss of ETL and the increase in MR pitch and Tq. If it is available and then applied then no problem - if it is not available then you have run out of TR authority and only forward airspeed will save you. If it is available and you don't use enough of it quickly enough the the yaw will continue and possibly accelerate - the response to this increased yaw rate is probably one reason why the aircraft descends - the pilot instinctively lowers the lever.
The other type of scenario is when the aircraft, as Nick points out, is built with insufficient yaw control margins to cope with the effects of the MR vortex from the retreating side of the disc entering the TR. This phenomenon is what they really seem to mean by LTE.
As for the TR experiencing Vortex ring -Boll8cks, which is the same answer to the Fenstron Stall argument. The Aerospatiale video of the test pilot getting the Gazelle up to 120 degrees per sec rotation and then stopping it dead using right pedal (not sure what it did to the transmission as that much pedal in a Gaz will produce a huge Tq spike) should poo poo anyone's theories about Fenestron Stall (it's just mishandling).