Two possible scenarios come to mind:
1) When you logged in as a "remote user" you accidentally entered the account/password for a local users
2) Your script is structured as
IF privilege set is remote user
//Remote user code
Else IF privilege set is local user
//local user code
If by any chance, the privilege set name is neither "RemoteUsers" nor "LocalUsers", neither set of code is executed and the Local Remote field's value will thus be unchanged. If its current value is "Local", then it will remain with that value...
If you have FileMaker Advanced, you might want to launch FileMaker without opening this file, enable the script debugger and data viewer, then open the file and monitor the values and script steps while this script executes to see if you can figure out more specifically what is happening here.
Ah ok, I figured it out - yeah by default I was logging in as the Admin which is part of a different privilege set. Thanks!