Should I install XXX in /usr or /usr/local?
This is a question without an obvious answer for an LFS based system.
In traditional Unix systems, /usr usually contains files that come with the system distribution, and the /usr/local tree is free for the local administrator to add things to. The only really hard and fast rule is that Unix distributions should not touch /usr/local, except perhaps for creating the basic directories within it.
With Linux distributions, like Red Hat, Debian etc. a possible rule is that /usr is managed by the distribution's package system and /usr/local is not. This way the package manager's database knows about every file within /usr.
LFS users build their own system and so deciding where the system ends and local files begin is not straightforward. So the choice should be made in order to make things easier to administer. There are several reasons for dividing files between /usr and /usr/local.
On a network of several machines all running LFS, or mixed LFS and other Linux distributions, /usr/local could be used to hold packages that are common between all the computers in the network. It can be NFS mounted or mirrored from a single server. Here local indicates local to the site.
On a network of several computers all running an identical LFS system /usr/local could hold packages that are different between the machines. In this case local refers to the individual computers.
Even on a single computer /usr/local can be useful if you have several distributions installed simultaneously, and want a place to put packages that will be the same on all of them.
Or you might regularly rebuild your LFS, but want a place to put files that you don't want to rebuild each time. This way you can wipe the LFS file system and start from a clean partition every time without losing everything.
Some people ask why not use your own directory tree, e.g. /usr/site rather than /usr/local?
There is nothing stopping you, many sites do make their own trees, however it makes installing new software more difficult. Automatic installers often look for dependencies in /usr and /usr/local, and if the file it is looking for is in /usr/site instead, the installer will probably fail unless you specifically tell it where to look.
What is the BLFS position on this?
All of the BLFS instructions install programs in /usr with optional instructions to install into /opt for some specific packages.