that is telling you that the functions that have been defined within the main program are localized to the program only ...
(defun thisprog (/ local1 local2)
(defun local1 ()
(do this stuff)
)
(defun local2 ()
(do that stuff)
)
)
This would generate that warning because the defun local1 and local2 are not only defun'd as a nested function of thisprog, but are also explicitly listed as local in the localize variable list.
Essentially it is telling you that the localized variable local1 is later being defun'd ....
That is inherent with this technique...
It should still operate flawlessly