Fair enough, you are correct that both can be self-hosted, and thus "local" by itself is not the moat. And I do not want to make claims about being able to beat them in recall, since I have no benchmark to compare against, and I believe the temporal graph of Zep is powerful.
Two things that do make it different from their solutions:
1. An adaptive per-project lexicon that is created from your own memories and adjusts the weighting to give more relevance to your project's lexicon. It focuses on one codebase only. I have never seen that in both.
2. Memories are rule-aware: "lesson" is a first-class citizen, and the retrieval process tries to show the rule rather than the event where it was applied and whether the rule was followed.
Thus, the advantage is in project specialization and rule awareness.