I feel like this is a misunderstanding of what Nanite is supposed to be.
Epic has as far as I know never implied Nanite is a system that performs better than traditional LOD’s, and I don’t think they ever intend for it to be that either. LOD’s are great, they perform well, that’s the whole point about them.
The point of Nanite is to have large amounts of high-detail models rendered at real-time. That’s it. If you want to maximize performance, Nanite is not the answer, and likely never will be. If you want to reduce asset creation workload while increasing visual fidelity and still have the game run at an acceptable FPS on consoles and high-end PC’s, that’s when you turn to Nanite.
Nanite is not about having good performance, Nanite is about having acceptable performance with a poly count orders of magnitude higher than what was previously possible to render real-time. The minimum hardware requirement for using Nanite with good fps is really high, but the trade-off is that the performance hit of Nanite isn’t going to grow that much regardless of how many polygons your scene has.
The other benefit is that as hardware gets more powerful over the coming years, Nanite isn’t going to get more expensive, and so essentially it will be cheaper and cheaper instead. I’m sure there’s ways they can optimize Nanite to require even less power than it currently does, but the the primary driver of reduction in Nanite’s performance draw is going to be improved hardware.
That said, I do agree they should update the documentation. While they don’t claim Nanite performs better than LOD’s, they should make it clear that it doesn’t. The part of the documentation you’ve quoted seems to me to clearly be answering the question of what meshes Nanite should be used for if you’re already using Nanite anyway, not the question of whether you should be using Nanite or not. But they way they’ve written the documentation, it’s a perfectly valid interpretation to read it as them claiming everyone should always use Nanite for every mesh. Which just isn’t true, and I know Epic knows that isn’t true.