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How would a browser-based bookmark website (that is not self-hosted) even provide the ability to use local storage?

SQLite? that somehow is stored locally, even on desktop? Could Litestream or some other new tech like that help here?

Or file-based? with some sort of sync-based system? Manual syncing or automatic? Similar to dropbox, I guess

I struggle to clearly see how local storage could be achieved technically

IndexedDB is probably what's meant, Local Storage (if taken literally) is a simpler and perhaps too limited a solution. There are some options that make IndexedDB easier to use, I've been using PouchDB, which works well. If syncing to Dropbox, you'd then dump the database into a JSON string/file and use the Dropbox SDKs to sync that. If syncing to a database, you can do something more efficient.

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