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The length LS used in the bending term is the the length of the wall segments between openings or wall ends, between the outer edges of the end stud assemblies.
The length Ls used in the hold-down displacement term depends on the Hold-down setting Use Moment Arm Length In Deflection Calculation. If the setting is not checked, it is simply the segment length Ls. if it is checked, it is the length between hold-down force and compression force locations i.e. the same distance that is used as the moment arm of the reaction to the overturning force. Refer to that topic for the calculation of this length.
O86 11.7.1.2 defines Ls as the wall segment length, but using the overturning moment arm is a more accurate way of converting vertical hold-down displacement to rotational shear wall deflection due to overturning via the ratio of wall height h to Ls. Refer to the American Wood Council's Special Design Provisions for Wind and Seismic (SDPWS), Example C4.3.4-2, Figure C4.4.3.4B.