Bing brings local results back in change to Windows Phone 8 app3
Nokia Lumia 920 and on a friend's HTC 8X. This jives with some published reports with the same news. While local results are still showing up in the web section of Bing, swiping to the side will show you local results only.
By the way, the original premise behind merging local results with general results was for Bing to intelligently decide if you were looking for a local or general search, but apparently this didn't work out too well. From the early response, it seems that habitual Bing users are happy to have their filtered local results back.
Thanks, Anonymous Tipster!