To be honest, I had never heard of the .local scheme before, but a quick search brought up this article , which fully explains this:
For the foo.exe application, if there is a foo.exe.local file, Windows will first look for the foo.exes application directory before starting a regular dll search. To mitigate the COM problem, redirection applies to both a full DLL load and a partial name load.
It seems that the .local file first forcibly searches for the absolute path in the application directory, whereas usually the absolute paths remain unchanged, and only relative paths follow the DLL Search Order .
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