Hello,

> As OSM doesn’t have a classification for non-residential local streets, I think “Residential” is the closest, but open to other suggestions – but I do think these roads should be classified.

OpenStreetMap *does* have a classification for non-residential local streets, and it is precisely highway=unclassified.

The name "unclassified" (like some other OSM details) comes from British terminology, where roads are classified as "unclassified" in the meaning "road too small for a classification number" (more minor than tertiary) in their national government classification scheme. Please check https://wiki.openstreetmap.org/wiki/Tag:highway=unclassified for more information.

highway=unclassified is a valid OSM tag which doesn't need "fixing" or classifying.

Roads or streets of truly unknown classification are tagged as highway=road instead.