SDKMaintenence tool does not work with local windows repository

>SDKMaintenenceTool.exe --setTempRepository file:///c:/myrepo

Although the same repo under "myrepo" has been demonstrated to work on a server, it won't actually ever pick it up.
There are a couple of problems here:

1) There is no error if the local repo does not exist (i.e. c:\myrepo\ doesn't even exist on disk)
2) There is no reason give why it's ignored if it does exist

So it's impossible to tell why the SDKMaintenenceTool ignored this argument and just went for the built-in repository instead.