Specifically, if LTO is so important that you need to be using it during development, you likely have a very exceptional case, or you have some big architectural issues that are causing much larger performance regressions then they should be.
Not necessarily. LTO does a very good job of dead code elimination which is sometimes necessary to fit code in microcontroller memory.
WebAssembly and lightweight MicroVMs are enabling FaaS with real time code generation but the build toolchain makes it less appealing, when you don't want it to take half a minute to build or to be slow.
I spent a few months doing performance optimisation work. We wanted to see how much performance we could wring out of an algorithm & associated data structures. Each day I’d try and brainstorm new optimisations, implement them, and then A/B test the change to see how it actually affected performance. To get reliable tests, all benchmarks were run in release mode (with all optimisations - including LTO - turned on).