Why nss-mdns registers host names as <hostname>.local?

In Ubuntuforums there are lots of posts about users who cant ping another Linux machine on the local network. Many solutions are proposed, including the decades old /etc/hosts file and installing winbind and adding "wins" to the "hosts" line on nsswitch.conf.

I believe that happens because nss-mdns only resolves names on .local domain and most newbies and Windows users don't know that simple fact.

My question: is there a reason for adding that .local domain to hostname? I mean a technical reason. Will it stop working or behave badly it that .local is not present?