I would furr it out and wrap it with drywall (veneer plaster is even better). There is no reason for the beam to expand since it is inside a dry conditioned space and the shrinkage of an LVL beam is unlikely to be seen in the finish work. If you are worried about the shrinkage at the ceiling intersection a simple quarter round, bed molding or apron trim would be far less noticeable than crown molding. I've wrapped multiple beams in a ceiling with drywall with no problems but I always use blueboard which keeps the surfaces flat.

So not putting sheets in my freezer. Don't need dust mites there dead or alive. Proper washing will eliminate the problem. My washer does cold prerinse with oxyclean to flush, then hot wash with detergent then 3 cold rinses. Before the front loader with heater the sheets were washed in apartment house top loaders. I couldn't get rid of the body oil odor until I started washing in machine witht he heater. I have a Miele but Electrolux makes them as well. I swear by those hot washes and also use them to get rid of mildew odor from linens I buy from France. One sani cycle completely restores the color and removes soil and odor from the fibers. @cindaymac - Don't you love those those shams and quilt? Also have them for our guest room bed with additional quilt for color accent. They wash nicely, too.

I like artistsharovna's second photo as a solution for this, but that still might be a bit much to execute. Here's an idea (I don't think I can find a photo of it) Get some hanging racks on wheels like they have in clothing stores and attach fabric hangings like beautiful old horse blankets, quilts or an oriental rug. You can push them together, overlap them or push them out of the way when you need to.

Do you have samples of the colors you are planning on using? I would paint some poster board and tape it up so you can really see what will happen throughout the day.