2 Balls?

I was caddying in a tournament the other day and before the round started, the head pro told the golfers to play two balls if there was a rules dispute. I.E.- Ground under repair, etc.
It was stroke play, so I think this is against the rules.

My question is when do local rules "overpower" USGA rules?

Rule 3-3 is a USGA rule:

3-3. Doubt as to Procedure

a. Procedure
In stroke play, if a competitor is doubtful of his rights or the correct procedure during the play of a hole, he may, without penalty, complete the hole with two balls.

After the doubtful situation has arisen and before taking further action, the competitor must announce to his marker or a fellow-competitor that he intends to play two balls and which ball he wishes to count if the Rules permit.

The competitor must report the facts of the situation to the Committee before returning his score card. If he fails to do so, he is disqualified.

Note: If the competitor takes further action before dealing with the doubtful situation, Rule 3-3 is not applicable. The score with the original ball counts or, if the original ball is not one of the balls being played, the score with the first ball put into play counts, even if the Rules do not allow the procedure adopted for that ball. However, the competitor incurs no penalty for having played a second ball, and any penalty strokes incurred solely by playing that ball do not count in his score.

b. Determination of Score for Hole

(i) If the ball that the competitor selected in advance to count has been played in accordance with the Rules, the score with that ball is the competitor's score for the hole. Otherwise, the score with the other ball counts if the Rules allow the procedure adopted for that ball.

(ii) If the competitor fails to announce in advance his decision to complete the hole with two balls, or which ball he wishes to count, the score with the original ball counts, provided it has been played in accordance with the Rules. If the original ball is not one of the balls being played, the first ball put into play counts, provided it has been played in accordance with the Rules. Otherwise, the score with the other ball counts if the Rules allow the procedure adopted for that ball.

Note 1: If a competitor plays a second ball under Rule 3-3, the strokes made after this Rule has been invoked with the ball ruled not to count and penalty strokes incurred solely by playing that ball are disregarded.

Note 2: A second ball played under Rule 3-3 is not a provisional ball under Rule 27-2.

It isn't a local rule, it's a Rule of Golf (Rule 3-3).