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The significance is that when RTC is running in local time, then it is undefined if the current time read from RTC is current winter time or summer time. When RTC is runnint in UTC time, then the time read from the RTC is independent of current time zone or current winter/summer time. This gives fewer complications.

However, if you boot Windows on your system, it expects RTC to be in local time, so that is what it should be running as. If you only run linux on your system, then RTC should be running in UTC time.

In reality, if you have a working time server also known as NTP server, then it is less important to get the right time from the RTC clock as the NTP server will fix the time early on during system boot.