LBS didn't get the lock ring tight, rode 5 minutes when I got home, felt two slips, then stopped riding.

Removed lockring (very easily), and cog. The threads still bite pretty well on when I pull on them with a fingernail. I'm just not sure how this looked new, so I don't know if the hubs OK or not.

The number of bike mechanics that don't know how to install a track cog & lockring correctly baffles me.

The problem probably wasn't the lockring being tight enough. The cog first needs to be tightened down properly before the lockring is cranked on. If it's not, the cog will slip when you apply any amount of back-pressure.

Tough to tell from the pic but it looks like a couple of the outer lockring threads are a little messed up. There's probably still enough to safely use the hub though.

I had my fingers crossed that 1. you would reply as I went through a bunch of old post and it's apparent you know your stuff. and 2. That the hub is still ride-worthy.

Hard starts and uphill climbs should be good indication of whether or not hub is trashed right?

No.

The inner threads, where the sprocket sits, look fine.
It's the outer threads that hold the lockring that looks damaged.
And hard starts and uphill climbs won't stress them.
OTOH, hard starts and climbs is a good way to get the sprocket good and tight before tightening the lockring.
Then, to test if all is well, some skids.

any thin, hairlike bits of aluminum when you pulled off the lockring and cog?

Some metallic dust, yeah, not much, but some.

If it does turn out to be hub needs replaced, is the LBS at any obligation to cover/partially cover repair? The issue was caused by their mistake after all.

Unless you're in the habit of doing skid-stops, it will likely hold.

I would always install my cog and lock ring as tight as possible, go mash up hills while avoiding any back pressure (useful to have a brake installed for this), and then tighten the lock ring one more time. I'm assuming you have a chain whip and lock ring tool if you took it off at home. It sucks that they didn't tighten it right, but Scrod is right - many bike shops do not understand how tight these need to be.

It's probably fine.

I never understand that either. Generally with so many hamfists around you would think we would all just overtighten things rather than leave them loose...