That is the multicast dns rfc, and says .local is used for zeroconf and not manual site-local configuration:

   Any DNS query for a name ending with ".local." MUST be sent to the
   mDNS IPv4 link-local multicast address 224.0.0.251 (or its IPv6
   equivalent FF02::FB)

The very first paragraph of that article says:

> The implementation of both approaches on the same network can be problematic, however, so resolving such names via “unicast” DNS servers has fallen into disfavor as computers, printers and other devices supporting zero-configuration networking (zeroconf) have become increasingly common.

Which seems to confirm what the original poster wrote - it sounds like a bad idea using it on OSX where it collides with bonjour.

It's not "Apple's error", .local is now an IANA reserved special-use domain name for multicast DNS, i.e. in the same category as .example and .test.

http://www.iana.org/assignments/special-use-domain-names/spe...

That RFC was created because of mDNS/Bonjour, to stop others from using that name for other purposes.