The only inflammation I got from LON was in my knees. I believe this was due to the patellar ligament being split open so the intramedullary nail could be inserted into the tibia. I imagine it would be the same for pure internal. I didn't have inflammation problems with the pins.
LON means lengthening over nails. It's the combination of an external fixator to lengthen and a non-lengthening internal nail to keep your leg at its new length until the bone consolidates. So you still have the nail after the fixator comes off.
The only mm you "lose" with LON is from an Ilizarov frame when the pins bend instead of stretching the rings apart. It depends on how long the pins are, how strong you are, and how heavy you are. The amount of this can be determined by an x-ray, but thinking of it in terms of "never-was-gained" rather than "gained-and-then-lost" is more accurate.