How? It sounds like this just permits computers in a LAN to share updates over the LAN. That may result in more traffic over the LAN, and it might create security problems, but it should reduce use of Internet bandwidth.
An examination of the screen in the article seems to show uploading enabled by default. There is a radio button where you can select uploads to be restricted to your local LAN, but if the screen has the default setting, then it shows internet uploads are enabled.