Possible resolution:

1. Change in 11.6 [class.local] paragraph 1 as follows:

   A class can be declared within a function definition; such a class is called a local class. A class is a local class if

   • its declaration inhabits a block scope or
   • it is a nested class of a local class.

   [Note 1: A declaration in a local class cannot odr-use (6.3 [basic.def.odr]) a local entity from an enclosing scope. —end note]

2. Change in 11.6 [class.local] paragraph 3 as follows:

   A class nested within a local class is a local class. ...

In 11.6 [class.local], the definition of local class is colloquially scattered across several paragraphs.