I was able to resolve my local log issue. I did the following:

1. Used local_logs_file and enable_local_logs settings in /srv/dshield/etc/dshield.ini
2. Removed {date} rename code from __main__.py due to UnboundLocalError: local variable 'local_response_path' referenced before assignment error.
3. Recreated pyz file using ./build_zipapp.sh
4. Restarted web-honeypot service

I tested this by using the python3 ./isc_agent -l DEBUG and making tweaks to the __main__.py file. This was introduced with the most recent commit of the __main__.py file: b01fc8c