This is not correct. I've tried the LAN no-login settings and it does not work for many devices (Roku/smart tv/phones). They also fail if you're not on the same subnet as Plex.
For this infuriating reason, moving off of Plex is on my to-do list.
yup--the weekend my internet went out was a real eye-opener and a number of things in my house got the axe including plex. i use kodi now and while its UX is nowhere near as good as plex, at least it works with a LAN-only connection
Oh definitely, once you connect it to an account it nearly refuses to work locally. I tried to set up a cloud-based Plex instance once and I connected it too early, breaking it because UPNP/port forwarding didn't work (yet) and local access was auto-disabled. Even enabled it only half-worked.
It is very client device dependent. And I found that when my internet went out, most devices would not work. But after several hours and some restarts it finally started working on some devices. I think this was because of some dns caching issues.