Yes, this issue is observed with IOS XE Everest 16.6.4 and ASA 9.8(2)33.
Sure enough "ip ospf lls disable" on the router side brought the OSPF adjacency up.
Issue is not observed with IOS XE Denali 16.3.6 - i.e. the lls workaround is not required. Maybe Denali has lls disabled by default?