It finds subdirectories of usr/local in the package build directory, and removes them, replacing them with maintainer script snippets (unless -n is used) to create the directories at install time, and remove them when the package is removed, in a manner compliant with Debian policy. These snippets are inserted into the maintainer scripts by dh_installdeb. See dh_installdeb(1) for an explanation of debhelper maintainer script snippets.
When the DEB_RULES_REQUIRES_ROOT environment variable is not (effectively) binary-targets, the directories in /usr/local will be handled as if they were owned by root:root (see below).
When the DEB_RULES_REQUIRES_ROOT environment variable has an effective value of binary-targets, the owners, groups and permissions will be preserved with the sole exception where the directory is owned by root:root.
If a directory is owned by root:root, then ownership will be determined at install time. The ownership and permission bits will either be root:root mode 0755 or root:staff mode 02775. The actual choice depends on whether the system has /etc/staff-group-for-usr-local (as documented in the Debian Policy Manual §9.1.2 since version 4.1.4)
This program is a part of debhelper.