It is my understanding that Smack clients needs to specify the correct IQ providers in order for File Transfer to be able to parse the stanza at run-time.
No it does not. What makes you think that? Why would an API want its user to need to configure existing providers? Please remove all code related to ProviderManager that does not register custom providers (i.e. ones written by you).
From your log it appears that Smack does not get an reply to the following IQ:
<iq to='test-receiver@test.tester.net/Smack' id='aaCvD-9' type='set'>
<open xmlns='http://jabber.org/protocol/ibb' block-size='4096' sid='jsi_6669221175945530172' stanza='iq'/>
</iq>
Now you need to investigate at the receiver of this IQ set, why it doesn't answer.