Negative...there has to be legitimate mission reasons for this to be the case. Sometimes this applies, more often times this doesn't (don't forget, not all squadrons involve planes/ops type people).
By what reg? The reg actual statement is "The local area is the place where the member lives and from which he or she commutes to the duty station."
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The "local area" discussion applies only to normal and special passes. That quote is where you can start and end leave from.
If you exceed the limits a commander sets on a pass, you must be one leave or you are AWOL.