Matt,
Glad to read your impressions of EXAFS LCF. I've had reasonable success with LCF using EXAFS spectra generated by ab initio molecular dynamics (AIMD) to figure out the local structure of dopants whose preferred coordination is symmetrically dissimilar from the crystals they inhabit, i.e. for which there are no good experimental standards. This can be pretty tough to do accurately with shell-by-shell fitting.
As you point out, disorder is a huge hurdle (in both LCF and shell-by-shell EXAFS analysis). We assume that a good AIMD model will simulate thermal disorder pretty well, but there are likely differences in configurational disorder between a periodic infinite structure and the real material due to defects. Fortunately, defects can be explicitly accounted for in a simulation, assuming you have the computational capability to screen a set of defect configurations.
Background subtraction should ideally be done using the same procedure for all data. Theoretical data could be used to refine a background subtraction procedure; spline fit parameters such as Rbkg or clamping may be tweaked to improve agreement between a simulated chi(k) and a measured standard over a reasonable k-range.
Simulating spectra with a range of binding energy offsets can explicitly address the problem of E0 choice, but it can also be used as a fudge factor for strain. In my LCFs, dE0 is the only parameter besides the fractions of the chosen phases.
To address the above problems, benchmarking is key. Quantitative agreement should be sought between simulated spectra and experimental standards to ensure the theory is sound and the chi(k) extraction is reasonable. However, there are probably still systematic sources of error which are larger than the uncertainties Athena's LCF tool will report; I agree with Mike's practical estimate of 10% or so.
I discuss these issues in somewhat greater detail in my recent (open access!) article that demonstrates how LCF using AIMD-simulated spectra yields answers that shell-by-shell fitting struggles with due to multiple overlapping components:
https://pubs.acs.org/doi/10.1021/acs.est.8b00297
Martin