Growing black portion on the screen of 2017 MacBook Pro. What could be the cause?
That definitely looks like a screen (LCD) issue.  Whether  it's on the MacBook or it's the LG, the screen is damaged and must be replaced. However, I'm assuming it's the screen on your Mac...


  The Mac is out of warranty, so the only way would be to replace the entire screen assembly.


Yes.  You would be correct; the only way would be to replace the screen assembly.


Macbook Pro screen display problems
Part of display not working, changing display region for macbook pro



  I'm guessing that using a MBP that doesn't have a graphics card with a second monitor is not a good idea


Connecting an external monitor to a laptop (not limited to Macs as PCs use the same Intel processors) that has a port specifically to do that wouldn't cause any damage whatsoever to your laptop.  

Damage happens and it could be from any number of reasons - a manufacturing defect to physical impact with something.  But most definitely, it's not because you connected an external LCD to your Mac.