help: it is 'file://localhost/', not 'file://local/'

The documentation has apparently always been wrong.

mercurial/help/urls.txt

@@ -1,66 +1,66
 Valid URLs are of the form::
 
   local/filesystem/path[#revision]
-  file://local/filesystem/path[#revision]
+  file://localhost/filesystem/path[#revision]
   http://[user[:pass]@]host[:port]/[path][#revision]
   https://[user[:pass]@]host[:port]/[path][#revision]
   ssh://[user@]host[:port]/[path][#revision]
 
 Paths in the local filesystem can either point to Mercurial
 repositories or to bundle files (as created by :hg:`bundle` or :hg:`
 incoming --bundle`). See also :hg:`help paths`.
 
 An optional identifier after # indicates a particular branch, tag, or
 changeset to use from the remote repository. See also :hg:`help
 revisions`.
 
 Some features, such as pushing to http:// and https:// URLs are only
 possible if the feature is explicitly enabled on the remote Mercurial
 server.
 
 Note that the security of HTTPS URLs depends on proper configuration of
 web.cacerts.
 
 Some notes about using SSH with Mercurial:
 
 - SSH requires an accessible shell account on the destination machine
   and a copy of hg in the remote path or specified with as remotecmd.
 - path is relative to the remote user's home directory by default. Use
   an extra slash at the start of a path to specify an absolute path::
 
     ssh://example.com//tmp/repository
 
 - Mercurial doesn't use its own compression via SSH; the right thing
   to do is to configure it in your ~/.ssh/config, e.g.::
 
     Host *.mylocalnetwork.example.com
       Compression no
     Host *
       Compression yes
 
   Alternatively specify "ssh -C" as your ssh command in your
   configuration file or with the --ssh command line option.
 
 These URLs can all be stored in your configuration file with path
 aliases under the [paths] section like so::
 
   [paths]
   alias1 = URL1
   alias2 = URL2
   ...
 
 You can then use the alias for any command that uses a URL (for
 example :hg:`pull alias1` will be treated as :hg:`pull URL1`).
 
 Two path aliases are special because they are used as defaults when
 you do not provide the URL to a command:
 
 default:
   When you create a repository with hg clone, the clone command saves
   the location of the source repository as the new repository's
   'default' path. This is then used when you omit path from push- and
   pull-like commands (including incoming and outgoing).
 
 default-push:
   The push command will look for a path named 'default-push', and
   prefer it over 'default' if both are defined.