Why is LocalSymbol treated differently inside a Module scope?

Question

Wanting to persist credentials entered via a dialog. While doing so I wanted to scope them by prepending a type to the symbol name. Came across this behavior which I find odd:

DeleteObject[LocalObjects[]]

f[key_] := Module[{},
  If[ValueQ[LocalSymbol[key]],
   Print["I have a value for " <> key],
   Print["No value for " <> key]
   ]
  ]

f[b] returns: No value for b

The trouble starts if I use a locally defined variable:

g[k_] := Module[{key = k},
  If[ValueQ[LocalSymbol[key]],
   Print["I have a value for " <> key],
   Print["No value for " <> key]
   ];
  ]

g["c"] returns: I have a value for c

key is still a string in the second definition - any idea why ValueQ[] thinks it is set?

I can probably manage scoping with a separate directory for each type, but why!?

Answer 1

A simpler version:

key = "c";
ValueQ @ LocalSymbol[key]

True

What's happening is that ValueQ has the attribute HoldAll:

Attributes[ValueQ]

{HoldAll, Protected, ReadProtected}

So, ValueQ is testing whether the unevaluated LocalSymbol[key] has a value, and of course it does. The value is LocalSymbol["c"]. It's basically the same thing as asking:

ValueQ[key]

True