Tasmota is a program that runs on an ESP22 or similar and can communicate with Hubitat via WiFi. It need not go out to the internet.
You set it up by communication from your computer to the ESP22 via a serial Link.
It is essentially an interface between the Hubitat and various devices that are hardwired to the the ESP22 or can if your device is WiFi Tasmota will communicate (i.e. Read or control) via the WiFi.
When setup you will essentially have:
Device (i.e. DS18B20 temp senor) ---> ESP22 ----->WiFi to your Router ---> Router to Hubitat.
Your DS18B20 now looks like any other Hubitat Device!
Some devices that use this chip can even have the inital flash done OTA with TuyaConvert (requires an rPi or similar to work well) or Sonoff DIY mode(not easy to get working on Windows).
The rest is basically so. Plenty of devices that use this chip as well:
My driver support most of them, one notable exception are the Aromatherapy devices. I have that as work in progress, but a bug in Tasmota has it not running stable enough for release, it should be fixed in the latest version of Tasmota, so I need to make a HE version of that. But yes, plenty of options for local LAN devices.
The Kali Linux Live boot usb image works well for tuya-convert as long as you have a supported wifi adapter. I have yet to run in on a laptop that wasnt supported though.
Yes, it is local TCP based communication over IP. UDP (SSDP) broadcasts are used for discovery. UDP might be used in the future for sending commands as well.