The URLs and domains created in local categories are treated similarly to the one created in the BCWF database. It works like a regex. The URLs and domains created in local policy are treated more like a simple match or path match.
For example: If www.test.com/path is added in local categories, everything after www.test.com/path will match this specific policy. In contrast, if it was created in local policy then www.test.com/path? will fail to match this rule.
Managing the URL list through the local categories database is the most ideal way to manage logs list of custom URLs and domains.