It does say "or the local language in each region".
It should say "Always Use Local Language".
No, the descriptive text is correct. When set to ON, all labels will be in English, for example Köln will be named Cologne, Roma will be called Rome etc.
When set to OFF, all labels will be in the countries language, Köln will be Köln, Roma will be Roma and so on.
Except the switch works the exact opposite as intented.