What is the difference between “local calibration” and “temperature based calibration”?

Local calibration means that the temperature reported by the TRV will be corrected to the temperature of the external thermometer with an offset. The benefit of this calibration is that the temperature shown on the TRV corresponds to the temperature measured via your selected external thermometer and the desired temperature you have set via BT and not the temperature measured via the TRV. Target temperature based method: in this case the difference between the measured temperatures at the TRV and the external thermometer will be adjusted via the target temperature set via BT. This makes it possible to use an external thermometer even if your TRV does not have the option to use an offset. The drawback is that your TRV will keep showing its own temperatures and not the ones set via BT.