334.10(A)(1) states that the NM cable can be installed in NORMALLY DRY location. woudn't you agree that the interior of LB is NORMALLY DRY location? depending on the location, i can't think of any immediate time that i have opened a LB cover and it was wet inside.
Besides i think sometimes it is O.K. to not follow the code verbatim, and make some exception, because I know from experience that it will be a safe installation. just like leland's installation.
Of course it all depends on the AHJ.
