LOCALHOSTPATH is a SAP Parameter attribute which is used to control UNC Path to local \usr\sap directory (Windows only) information. This is available within R/3 SAP systems depending on the version and release level.
Below is the standard documentation available and a few details of the attributes values .
LOCALHOSTPATH required internally to substitute the UNC path
to the local path.
See SAP Parameter Documentation for full SAP documentation for this profile parameter.