There are benefits too. Some developers might learn to use Claude Code outside of work with cheaper models and then advocate for using Claude Code at work (where their companies will just buy access from Anthropic, Bedrock, etc). Similar to how free ESXi licenses for personal use helped infrastructure folks gain skills with that product which created a healthy supply of labor and VMware evangelists that were eager to spread the gospel. Anthropic can't just give away access to Claude models because of cost so there is use in allowing alternative ways for developers to learn how to use Claude Code and develop a workflow with it.
And is running a local model with Claude Code actually usable for any practical work compared to the hosted Anthropic models?
It's an okay-enough tool, but I don't see a lot of point in using it when open sources tools like Pi and OpenCode exist (or octofriend, or forge, or droid, etc).