What does it mean "fully local"? I have an old "kitchen Macbook" that I'm using pretty much exclusively for stuff like looking up cooking recepies. I don't have any photos there, any messaging apps, etc. But I'm logged in with my Apple account.

And guess what, that "local graph" sees everything I did on my iPhone - I see contacts from all messaging apps, including Signal. I see image-based people clusters, even though there are no local pictures to match faces against.