local has nothing to do with the scope of the variable...(snip)...the time it makes any sense is in lexical scoping...it's how it's used in the perl documentation, which doesn't have any other scope to talk about...(snip)...read Dominus's Coping with Scoping.
See perldoc -q "dynamic and lexical"
Also, in Dominus' addendum article Seven Useful Uses of Local
there's some stuff on dynamic scoping.
Update: also (on an unrelated note), in your node above, the comment in this line is incorrect (as pointed out by tye in the CB):
require "lib/Foo.pm"; # no @INC searching!
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