Although it appears that Google will release this app, you should take this with a grain of salt. This was discovered by 9To5Google (via Android Police) during an APK deep-dive. As a result, this is not a user-facing feature, and Google has not publicly announced it. Google has the ability to take it away at any time.
It appears strange that this code is contained within this app. However, the Clock app will presumably be updated to show your local weather as well as the time. The standalone weather app may provide the Clock app with local weather.