Local results means that if I search for "driving laws", Google gives me .gov sites for my state as the top results, while Kagi's first page gives me results for 8 other states (including Alaska!) but not for my state.
There are a lot of kinds of queries that benefit from knowing the user's location even though they aren't actually looking for a place that exists on a map.
(I'm a happy paying Kagi user, but OP is right that this is its weakest point by far.)