How to set HR zones based on LTHR Lab test?

Training zones are only useful to categorize workout efforts. From an aerobic fitness perspective, only the 2 ventilation thresholds matter really, so a three zone system would suffice (close to but below VT1, between VT1 and VT2 and above VT2). See publication from Stephen Seiler's polarized training about this topic.

VT1 can be estimated through HRV DFA alpha1 ramp test reliably. Typically, it is at 60-65% of VO2 Max, or 75-80% of HR Max.

VT2 can be estimated through the watch HR, HRV, output dynamics ramp test model pretty reliably and is often proxied by/confused with the lactate threshold. VT2 is typically at 80-85% of VO2 max, or 90-92% of HR Max.

https://www.ncsf.org/pdf/ceu/relationship_between_percent_hr_max_and_percent_vo2_max.pdf

So the key here is the training plan you use and how it defines the training zones. If you use a Joe Friel training plan, for example, use his zones, etc. If you use a Garmin Plan, keep the standard zones on the watch.

The watch doesn't care at all about the training zones for any of its metrics: everything is assessed as a % of VO2 Max. So the 2 numbers that really matter here on the watch are your resting HR and your VO2 Max estimate (which mostly depends on your HR Max setting and your training patterns).

I would use power or pace (for flat road terrain) to set up zones for workout targets and use % of HR Max for HR zones. If power or pace zones don't work for you, using LTHR zones is just fine but harder to execute for >LTHR training targets: you typically use shorter intervals there, and the HR lags.