Not only that, it is useful, this way. Your proposed solution would break a valuable build tool for the sake of correctness in naming terms. That is unacceptable.

A better idea, would be to have a NEW ruler mode, aligned to the root.

Warkirby, can you give an example of a building sequence that makes use of the local axes as they are now, that would break if this is changed to meet Jacek's expectations?

The axes align themselves to the OLDEST NON-ROOT PRIM in the linkset. ("Oldest" is measured by creation date of the prim, which you can check with the Inspect floater.) I can produce screenshots documenting this, if needed.

This is a very strange way for it to choose which prim to use. I doubt anyone could argue that this behavior is either "expected" or "useful". Any "valuable build tool" which takes advantage of this quirk in the Local ruler mode UI would be more robust using the Reference ruler mode, anyway. (Setting aside the slight inconvenience that "Use selection for grid" is broken when selecting a linked part – but that's a different bug entirely.)

Anyway, I fixed it by initializing the bounding box from the root prim first. Now the move, rotate, and scale manipulators are oriented with the root prim, as they ought to be.

Note that the bounding box I'm talking about is not related to the physics simulation; it's part of the selection manager, and as far as I can tell without seeing the server source, is client-side only.

I'm mostly satisfied now. The only annoyance I have is that the order the prims in a linkset are selected when Edit Linked Parts is turned on, means that the axes change. But, it's a minor annoyance, and can be worked-around by un-selecting and then re-selecting the root prim, if desired.