I have a single feature class that includes polygon data for multiple states. I want to create individual feature services for each state and restrict the data that is being extracted from the feature class to include only the single state's data. These feature services will be edited in ArcMap using a GIS Server connection setup in ArcCatalog. I have created a feature service with a definition query to restrict the data to only the one state and I defined the extent to match the state boundary and when the user brings the feature service into ArcMap, it looks correct. However when a local copy is created along the state boundary and there are polygons hidden in the view window from an adjacent state, the local copy will include all polygons from both states.
Original mxd file with definition query applied that is used to create the feature service:
Feature Service polygons when first loaded in ArcMap:
Local copy of polygons
Also documented in Esri Case #01924634 - case resolution: known bug NIM087292 : Creating a Local Copy for Editing in ArcMap does not honor settings from the map document.