No idea if that's what google is targeting here, but that is a cloud service, that presumably gets a copy of people's Google Drive OAuth keys if they use Google Drive with Transmit and the sync service.
It’d be one thing if Project Zero was running serious audits but this policy is designed to let them check audit checkboxes so when you lose data, it’s hard to sue Google.
There's a reason why airgapping is the only way to secure important systems (and of course that can also have a number of vulnerabilities).
And besides, how do you know it's a local only app if you haven't audited it?
"Just trust me bro" -- some dev
If it makes outbound connections and you control DNS, you own it.
I imagine you could do this sitting in a café with an open hotspot.