As a follow-on (for others’ web searching), if your package manager does happen to come up without querying a repository, and if you do try to install a package with the LC_PAPER set, you* may* get this error dialog:
terminate called after throwing an instance of 'std::runtime_error'
what(): locale::facet::_S_create_c_locale name not valid
YaST got signal 6 at YCP file String.ycp:170
/sbin/yast2: line 427: 5509 Aborted $ybindir/y2base $module "$@" "$SELECTED_GUI" $Y2_GEOMETRY $Y2UI_ARGS
(process:5674): Gtk-WARNING **: Locale not supported by C library.
Using the fallback 'C' locale.
which still says nothing about this environment variable specifically, but at least has some “hint” of the problem with the mention of locales.