I have a simple question: are there any cases where game LOD models don't need to be created? Obviously you need LODs for landscapes, large props, characters, vehicles etc. But what about small indoor props which are unlikely to be seen from large distances? I understand that it depends on genre and other factors like the distance to the camera, but still, is there any common standard regarding when LODs need to be made?
Make (and use) them when you'll see a benefit from them. Don't when you won't.
As you said, this can vary widely between games, but it's about as general a statement as you can make. In some cases, as you said, you won't need LODs for clutter geometry because you can simply remove it from the scene. But maybe in other cases you have an engine where it's quicker (at runtime) to drop to a lower LOD than remove the mesh entirely from the world, so you might want to do that instead. Or perhaps it's alternatively faster to swap LODs than put the mesh back in the world, and you have a game with sniper rifle scopes where the player might need to see far-off distances very suddenly.
It just depends on the needs of your project.