There is also have an issue with method references because a local function has no owner type (from the Java POV, obviously there is an owner class once desugared by the compiler),

Yes, unqualified method references have been on our radar since Java 8, and yes, we know that local methods would need them, and yes, the rules would parallel those for unqualified method invocations.  (I didn't raise these in response to Lukas' suggestion about local methods, because I want to keep the discussion focused on the feature in front of us.)

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