If you can wait a few months, Workflow 12 is adding native Directory Server user management activities so you don't have to write SDK scripts for this sort of "Create user" task.

Why do you need to call GetAllUsers to check if a specific user exists though? I believe you have in the hundreds of thousands of users. That's never going to be performant, even if it doesn't time out.

Do something like call GetUser in a try/catch and check if it fails with a "User doesn't exist" type error code. I don't know exactly what it returns - put in a known invalid value and test.

//Retrieve an LFDS user by user name. The user is in the ROOT LFDS organization. 
​​​​​​​User LFDSUser = db.GetUser("user name value", "ROOT"); 

Alternatively, in a try/catch, try to create the user without checking if it exists first and check for a "User already exists" type error response.