If you disable the Ethernet/WiFI then you can create a local account, but you have to do a small.extra step…

press SHIFT+F10 keys to open Command Prompt.

Run the following: OOBE\BYPASSNRO

After this, setup will reboot the computer and you’ll get a new option I don’t have Internet or Continue with limited setup to skip the Internet requirement and you can create a local account as well.

Or, when it asks for your email address and password enter [email protected] and any random password. It will tell you that account has been deactivated and allow you to set up a local account.