Its true, we still upload a file to that endpoint in order to generate your SDK.
The reason we call it “local” is that if you generate it this way the SDK is not available on Postman Cloud mode: it immediately gets downloaded to your local filesystem and no longer exists in the cloud. This allows you to generate SDKs without disrupting other developers or users looking at your SDKs in cloud mode.
We might need to update our docs to make that more clear.