Yes indeed, only file:/ and scheme less urls are locals, thrash:/ or recentlyused:/ are not.
And this may needed to do this in other knotify slot* in the future.
I can add this in comment, if you file it is needed.
Looking at the git history, this was a KF5 porting bug. KUrl(fileName) was wrongly ported to QUrl::fromLocalFile(), while we should use QUrl::fromUserInput() instead.
While at it, we should fix all the occurrences in this file (e.g. slotFilesRemoved() and so on).