Ambiguos documentation on `provider_installation`

Terraform
1

Goal is to work on a terraform project with a mix of public and in-house providers.

.terraformrc looks like this, my intent is to refer to local binary for an in-house provider and hit the origin for everything else.

provider_installation {
  filesystem_mirror {
    path = "$HOME/.terraform.d/local-plugins"
    include = ["terraform.local/*/*"]
  }
}

terraform init fails for all providers hosted in public registry.

╷
│ Error: Failed to query available provider packages
│ 
│ Could not retrieve the list of available versions for provider hashicorp/aws: cannot search $HOME/.terraform.d/local-plugins: lstat $HOME/.terraform.d/local-plugins: no such file or
│ directory
╵
╷
│ Error: Failed to query available provider packages
│ 
│ Could not retrieve the list of available versions for provider hashicorp/random: cannot search $HOME/.terraform.d/local-plugins: lstat $HOME/.terraform.d/local-plugins: no such file
│ or directory
╵

From the docs

If you have a local mirror of a particular provider and intend Terraform to use that local mirror exclusively, you must either remove the direct installation method altogether or use its exclude argument to disable its use for specific providers.

emphasis mine

I was assuming that implied direct block would be added to sources defined in provider_installation. Later from another discussion

If you have an explicit provider_installation block then that totally disables Terraform’s Implied Local Mirror behavior.

I got this to work by adding a direct block with explicit exlcude

provider_installation {
  filesystem_mirror {
    path = "$HOME/.terraform.d/local-plugins"
    include = ["terraform.local/*/*"]
  }

  direct {
    exclude = ["terraform.local/*/*"]
  }
}

I realize that the official doc is suggesting that only for a particular provider, but maybe we can enrich it by something like

If you intend to access public providers as well, then you must add a direct installation and its exclude argument should whitelist local providers.