Here are my comments - all IMHO, of course, based on many years of looking at SMART data on failing drives, but this data is open to interpretation, so YMMV

webbeing wrote:
Immediately after first power on, one of the drive gave a SMART error status.
Actually, looking at the data you've supplied, I don't see anything for the "problem" drive which actually qualifies as a true SMART failure being reported by the drive (strictly called a "pre-fail threshold exceeded"). FYI, I
think that the column labeled "Original value" is actually the raw value of each SMART attribute (is that straight from the NAS box display, as you've shown it?).
I don't know this LG NAS box, but I expect that what you're seeing is the NAS software's interpretation of a drive problem, causing that software (and not the drive) to give you a warning. And I would agree with that concern - the "problem" drive has non-zero values for attributes 5, 196 & 197, which are classic indications of a deteriorating drive.
Your challenge regarding getting a replacement drive/NAS box, is that there is no universal agreement about when a drive has deteriorated enough to be called
faulty, until an actual "pre-fail threshold exceeded" event (or other obvious problem e.g,. drive fails to read all blocks) has occurred.
webbeing wrote:
I think it is an erroneous error status.
As explained above, I disagree - there are signs of a problem. However, this is just one snapshot of the values, so we have no trend/change information, to know whether (or how quickly) things are deteriorating.
webbeing wrote:
Could you please take a look at the below SMART's data and indicate if the error is real and which "sub field" within the SMART data is the culprit?
As explained above, there is no actual "threshold exceeded" situation that I can see on the "problem drive", hence my earlier comments about the likely source of the "warning" being the NAS software
interpreting the SMART values with some hueristics to suggest (correctly) that there are the early signs of a problem.
Whether that will be enough for Costco to replace the unit isn't something I can answer for you. What you could do is to try to use the fact that the unit
itself is reporting a problem, as indication enough that Costco should consider the unit faulty (after all, this isn't
your interpretation of the SMART data which is saying there is a problem, it's coming from the NAS box itself).
Good luck!
P.S. Before you return the unit, you'll want to make sure to truly
wipe (not just delete at an OS level) any data you've written to the NAS box, in case Costco just give your box to the next guy in-line, after they (hopefully) give you a replacement.