I believe that the later-no-harm criterion is so confusingly worded that people think it means something it doesn't. It's defined in terms of not harming a candidate, but people think that it means that adding a second, third, ranking etc. will never harm the voter. So they think that LNH means that every voter has an incentive to give their full ranking.
Because IRV fails the participation criterion, it's possible that the voter can be harmed even by adding their first choice. Sure, this will never change the winner from their first choice to someone else, but it could change the winner from their second choice to their 15th choice.
LNH is meaningless without the participation criterion and it's trivial to show that failing the participation criterion means that a voter can be harmed by adding their second choice as well (e.g. their first choice gets eliminated and their second choice causes a participation criterion failure).
The only method that satisfies both LNH and the participation criterion is... plurality voting. Or some kind of plurality-equivalent ranked voting which only looks at the first choices. And here it's clear that it only satisfies LNH by completely ignoring everything else after the first choice.