I'm divided on the question of whether Locals or the We does a better job of expressing K8P's strength in diversity.
On the one hand, Locals does a better job of tying the library to the Karak as a whole. It draws from the three most numerous races of citizens: dwarves, humans, and halflings. This gives an opportunity for them to mix socially and professionally in a way that, as far as I can tell, mostly doesn't exist inside K8P: generally, dwarf clans do some sorts of things in their mountains, humans do other sorts of things in Karag Nar, and halflings do their own things in the Eastern Valley. They mix a little at the edges, but there isn't anything that all three of them do together, yet, and this Library represents a shining opportunity for that: in binding the Library to the Karak and the Karak to the Library, it also binds the races together. That is a seriously good thing that I value very highly.
On the other hand, the We option would be monoracial: once the Library-We colony exists and understands its job, there's really no point in having a different kind of librarian as compared to the librarian that is functionally immortal and has the exact same knowledge available to all its component bodies. But at the same time... where else but Karak Eight Peaks would this have been possible? Without Belegar having already established a policy of multiracial citizenship for humans and halflings who had proven themselves, there's no way the uplift-and-integration option we chose way back at the start of our Loremaster career would have been available. But because K8P is what it is, the precedent established for familiar allies of the dwarves was able to be extrapolated and extended to this totally new, extremely strange and initially hostile, entity. As a symbolic gesture, it's pretty meaningful for supporting that when we say all well-intentioned people are to have access to this library, we mean all: the nonhumanoid, the unsettling, the ones nobody has befriended or even knows about yet, everyone's welcome as long as they're willing to play nice. Not just the socially acceptable ones.
I still support Locals over the We, because, as mentioned, I value very highly the notion of binding the fabric of the Karak more tightly and integrating the Library in that, and because I want the Library up and running faster than I expect it will take to get the We to understand what their role is and get them set up in it: to be a proper library and not just a storage unit for Mathilde. But after thinking about it a lot, I don't think it significantly undercuts our goals of diversity and acceptance to make the We our librarians (or, er, librarian singular): it approaches the problem from a weird angle, to be sure, but it nonetheless embodies those core values.