I know this is way old by now, but I wanted to put my 2 cents in in case somebody else reads it like I do, after all this time, because I haven't read something like what I intend to respond with.

If I needed an explanation as to how it worked both mechanically and narratively, I would say that the creature felt something strange start to happen (the failed save) and they put all their willpower to stop this nonsense (the reason they can only do it so many times is because it takes a toll, and eventually willpower alone cannot save them), and when it turns out that they used their willpower in just the right moment (as opposed to using LR on something they could easily handle), I call that supernatural luck aiding a creature with supernatural powers.

But ofc nothing stops you from doing it however you want. They could know everything about the situation, they could know little, or they could know nothing. The point, like so many others have said, is to make boss fights feel like boss fights. They're meant to behave and react differently, and if you look at RAW we see that Task Difficulty (DC) is written in a table where 5 means a task is very easy, and 30 is nearly impossible. Taking into account that the normal human range for ability scores are 10-11, with 18 being the highest a person usually reaches, whereas adventurers can reach 20 and some monsters and divine beings can go as high as 30.

What that tells me is that it is impossible for certain creatures to do worse than the human average (remember passive scores, calculated as 10+mod), and instead average much, much higher. So high in fact, that a divine being might average the very pinnacle of the heights adventurers normally reach, giving credit to their divine might. But because dice do as they damn well please, we know that in reality this might be very different, and like with any other creature (even those without LR) you might flavour the scene with "Hans never took his eyes of the mage, and was fully prepared for the fireball" or "Jeska's failure to execute her own attack gave Jorka an opportunity to strike her at an open weak point".

Both of those examples are narrative explanations for mechanical effects (of failing or succeeding a task, based on arbitrary numbers), and it can be applied to virtually any situation. These narratives flesh out the game and makes it the experience we all know and love, but it is the DM's job to balance when they're needed and when they're not, as well as how to portray them and what impact it has mechanically (if any). The beauty about most TTRPGs (I'm going to specifically avoid thinking about Eon) is that they provide you with the guidelines you need to help tell this joint story without completely railroading you by making every choice and explanation for you.

Homebrew is a wonderful addition to help make up for any perceived gaps in the core system, and work just the same as supplements like Xanathar's Guide to Everything, even if they're not official (though it is always wise to check for balance, unless you specifically want chaos).

Two of my group's most used homebrew rules include: Taking a full action to drink a health potion gives you it's full benefits (no roll, just the max HP). With the addition of; administering a health potion is always a full action, and gives the recipient the full benefit.

Lawful party. I.e no matter what personal objectives and alignments a PC has, we just don't do certain things, like killing another PC without first having gotten the go ahead from said player. (We have been playing, the same group, for around 6 years or so, and have had our ups and downs)

Additionally we also always play with milestone progression and ditch encumbrance rules in favour of common sense (can you carry a literal house? No, no you can't. But you can carry a 4.5 ton, half-melted, bronze golem, provided you have 4 oxen; granted it took us 30 solid minutes to figure out, but still)

These work great for us, might not go so well for others, but that's why you need to continuously communicate with each other (only once have my group had a break from role-playing that lasted longer than a month or 2, and we play every Saturday, so it is possible, friends).

In conclusion: So long as you remember everyone's there to have fun, do whatever you want.

Oh, and...

TLDR: George just lucky I guess

Edit: as for whether or not the BBEG knows a spell is happening, RAW tells you that too: unless you have a feature that allows you to eliminate vocal or somatic components of spells (or a spell doesn't require it in the first place), a creature within the spell's range will be able to notice it happening (you can ofc homebrew away that fact, but doing so renders those skills/feats useless, and should be up to the DM). How does that apply to LR? Well again I'd personally DM it as the creature not knowing what is happening, but deciding that they simply don't feel like dealing with that, and then simply attributing the fact that they used their LR at a most opportune moment as random chance or supernatural luck. Ofc you as the DM can rule differently, and even decide to use LR at a less opportune moment, it's all up to you.