You should not have to do this at all, and you didn't have to with older versions of Plex.
You also used to be able to log into "your" Plex server with a local account, but some years ago it was changed to require authenticating with Plex, Inc. to log in.
Perhaps it's changed in the last couple of years, but Plex made the process of not letting it call home extremely difficult, and defaulted to new garbage being turned on as they added new garbage, and re-enabling garbage that they made big changes to.
After multiple internet issues resulted in me not having access to my local Plex server and not being able to fix that, I decided to drop it. Maybe tons of backlash prompted them to fix this? I don't care, I'm a happy Jellyfin user now.
Plex probably has changed this, but a couple of years back it asked for my Plex account on the clients when my Internet went down. It let me login from localhost, and I had to disable login for my LAN so other clients were accepted. IIRC later Plex Inc also was down for a short while, and many people complained on the forums that their servers couldn't stream if Plex Inc. was down.
Yes _technically_ you can go into settings and whitelist local IP ranges, on which you can log in with local credentials. But it's not on by default, and you can't turn it on if the Internet goes down and you can't auth with plex.tv.
You also used to be able to log into "your" Plex server with a local account, but some years ago it was changed to require authenticating with Plex, Inc. to log in.