I'm not sure how this doesn't qualify as unlimited local calling?

It just depends on how one defines "local". Nowadays, people assume your entire country at a minimum. 15 years ago, it was 10 miles or so. It was the mobile era and its inherent independence of landline tariffs that changed things. For three generations, Ma Bell subsidized local calling and infrastructure with long distance charges; the MCI court case and the subsequent breakup of Ma Bell blew that apart.