I was wrong in all my responses. lb-local is definitely broken.
In my case, I "though" it's working because my test was with PPPoE WAN. When PPPoE link is lost main routing table switches to default roue with higher distance and things "seemingly" work. But the routes are not read from LB tables and that's the bug. Also when I finally re-tested with straight Ethernet thinks got broken pretty badly pretty quick.
I've reported the bug in beta forum HERE. Sorry for all the confusion I've caused.
