As a long-time LaTeX user, I'm a little disappointed to read these results, but I fully believe them.
I've spent countless hours fighting against the layout algorithm to get images to go in the right place, among other frustrating issues.
Efficiency aside, using LaTeX is expected in fields like physics and math, and if you write your paper in Word, readers will be biased against it (consciously or subconsciously).
On the ArXiv, the vast majority of papers are typeset using LaTeX, and of the non-LaTeX papers, a large fraction of them are low-quality or written by cranks, hence the negative association.
> if you write your paper in Word, readers will be biased against it (consciously or subconsciously)
I've found that happens mainly with papers that are not only in Word but formatted a bit weirdly. Those can be avoided by people who use Word regularly, though, and in that case you usually have to look pretty closely to tell if something was done in LateX or Word, if they both use the same template (e.g. the Word vs. LaTeX versions of the ACM paper template).
Telltale "Wordisms" that I run across fairly often, and probably do have a negative reaction to: 1) large spaces due to justification in two-column formats without hyphenation (solution: turn on auto-hyphenation); 2) a paragraph being in a totally different font or font size from those around it (solution: paste without formatting); and 3) PDF title set to something like Paper.docx (solution: set a title when exporting to PDF).
>I've spent countless hours fighting against the layout >algorithm to get images to go in the right place
This probably means you were using it wrong :) LaTeX almost always knows better than you, and you should trust it. You are much better off "guiding" the image placement rules than trying to set them manually!
Efficiency aside, using LaTeX is expected in fields like physics and math, and if you write your paper in Word, readers will be biased against it (consciously or subconsciously). On the ArXiv, the vast majority of papers are typeset using LaTeX, and of the non-LaTeX papers, a large fraction of them are low-quality or written by cranks, hence the negative association.