The git-lfs unlock command fails if there is a symlinked folder in the parent path of the repo.
mkdir parent
cd parent
mkdir outer1
git clone https://github.com/jbstewart/git-lfs-symlink-issue.git
ln -s git-lfs-symlink-issue outer2
cd outer2
git lfs lock folder1/folder2/TestImage.png
cd ../outer1/git-lfs-symlink
git lfs lock folder1/folder2/TestImage.png