This is the local sketch coordinate system, the sketch origin is set to the center of the cylinder and the Sketch X is set to the axis of the cylinder. It's just the coordinate system chosen for that type of workplane. It is quite reasonable for a cylinder that does not happen to already be oriented around the component origin coordinate system.
but the cylinder is centered around the model origin. what is the originating plane taking as it's center. It's not the center of the cylinder-
sorry, @laughingcreek is correct - it is actually the pick point used to create the tangent plane. Agree that this doesn't make a lot of sense. We have a project in the plans for later this year to fix some of these issues, and this will certainly be one of them. It's not clear what the origin should be, to be honest, but pick point is pretty clearly incorrect. The sketch axis, however, should be oriented along the cylinder axis, IMO.