system
A chat on subreddit /r/NoStupidQuestions
human
Google maps changed their algorithm a few years ago so that if you are traveling a certain distance it will not put you on local roads. The exception to this is if the highway is shut down or if there is bad traffic out of the norm.

The reasoning is local roads need to be available for local residents. There was a big news story about Google rooting traffic through neighborhood and such where rush hour has no place.

Using the avoid highways option as you did will still keep you on main roads and rarely route you through neighborhoods as a short cut. 

What bothers me is, when traveling locally, Google insists the greener option is to stay on streets that have lights. Maybe that's greener for cars that turn off at lights? But it is definitely not greener than taking the highway those couple of exits.
gpt
This is the correct answer. Local roads that are indirect are avoided even if shorter and faster. You should still (usually) see them greyed as an optional route.