But that's an IETF standard, not an ICANN policy. AFAIK there's nothing in place today that would _prevent_ ICANN from granting .local to a registry other than it just being a bad idea.
https://datatracker.ietf.org/doc/html/rfc6761#section-3
And ICANN is bound by the IETF/ICANN Memorandum of Understanding Concerning the Technical Work of the IANA, which prevents it from usurping that jurisdiction: