Maybe it's what you meant, but let me underline that "local" does NOT mean under your control. As long it's with Microsoft, it will fall under the exactly same Cloud Act, so it can be shut off or copied over the pond on a whim.
You say that but that's not reflected in the law, and historically the us government has repeatedly created such sweeping surveillance systems. It's highly unlikely they only made it legal, and aren't using it sweepingly considering theyre on record doing so before it was legalized through the act before too...
And as that's international law... It's always kinda a coin toss whenever anyone actually pays it any attention. No real recourse if violated after all.