Is there really a security advantage when it comes to spittling a password?

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Tags:
Cryptography
Encryption
Password
I've been reading more and more about the LANMAN (LM) hash and I'm having trouble understanding some of the concepts. Is there really any security advantage when it comes to splitting a password, encrypting the two halves separately, and combining the halves to form one hash? Or is it just more of "security through obscurity"?

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