The difference between local and remote is where the encryption and decryption process occurs. 

For remote protect and open operations, the encryption and decryption occurs on the <MadCap:variable name="General.Company-name" /> server. The benefit is that you don't need to add the encryption and decryption logic to your app. However, the maximum file size for remote operations is 25 MB.

For local protect and open operations, the encryption and decryption occurs in your app. The benefit is that the actual files never have to leave the device where your app is installed. Local operations are required for any files greater than 25 MB.