Local Files are not meant to be long lasting. They are just our means to work on the project. Once you've sync'd you could just delete the local file and Revit will just make another local file the next time you open the central file.
As such Local Files should be located on your PC. FWIW, if you use Autodesk's cloud service ACC that's where the project's cached files goes too.
Placing local files on a network can expose any weakness of that connection while working on that "externally" hosted local file. Hosting a local file on an external resource in your network isn't necessarily bad either, it just means you may occasionally pay a penalty for losing that connection or suffering through poor performance until the network admin determines that the server needs a restart. The central file is the important file that needs to be on the network resource so everyone can access it. The local files are not.
I've been able to get a project back on line a few times when a major server failure occurred. We took the newest local file from a user (stored on their local PC) and recreated the central file on a different server. Our team was back to work while everyone else (in CAD) was down for about a day, until the computer team could get the server back up. So in that sense local files on the local PC is a form of redundancy that can be taken advantage of in extreme circumstances.
Steve Stafford
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