I know that Maven houses the outcome of the build in the local repository (artifacts goes installed under ~/.m2/repository/), but it also outputs the compiled classes in the target folder next to src.
Is there any difference between what goes in the local repository and what goes in the target folder?
They are completely different and shouldn't be mixed up.
target represents the build directory. This is to say, every temporary file that is generated during the build from the sources ends up there. Quite notably, you'll find the compiled classes of the main and test Java sources, but you'll also find lots of things in there (generated source files, filtered files, etc.). What matters, is that everything that is contained in this folder is inherently temporary. You can delete it at any time, running mvn clean, and be assured that the next build will (or at least should) work just fine. All the files and folders generated under target serve a single purpose: create the artifacts of the project. A Maven project, for example with jar packaging, will have a single main artifact, which is composed of its final name with a jar extension, and will contain the compiled Java classes. The final name can be a custom name, set within the POM, or the default one derived from the Maven coordinates of the project. Such a project can also have additional attached artifacts, like a test JAR, or a sources JAR.
The local repository only contains the artifacts. There are no temporary files in there. What is installed when running mvn install is strictly the generated artifacts of the Maven project, i.e. the end products, plus the POM file of the project. Everything that served to create them isn't put in the local repository, and the build of a project must never put temporary things in there. Keep in mind that the local repository is a Maven repository, and, as such, follows a strict naming scheme: a project with a group id of my.groupid, an artifact id of my-artifactid and a version of 1.0 will get installed in the folder my/groupid/my-artifactid/1.0; in which you'll find the POM file, and all the other artifacts. The name of the artifacts themselves cannot be overriden: it will be my-artifactid-1.0.jar for a JAR project (perhaps with a classifier added).
This is generally a source of confusion: the name of the main artifact file that is generated under the target folder is completely distinct from the name that it will have in the local repository when installed, or in remote repositories when deployed. The first can be controlled, but the latter is defined by the naming scheme of the repository, which is calculated from the coordinates.
To recap: target contains all the gory temporary details during the build which creates the artifacts of a project (main JAR, sources, Javadoc... i.e. everything that is supposed to be deployed and released by that project), while the local repository (and remote repositories) will contain only the artifacts themselves.
Not much in terms of the generated module.jar if that's what you are really concern about. The .jar generated is the same, also considering recompiling the code would clean your /target folder but not the .m2 one.
Though /target folder would generally be composed of the compiled source classes /target/classes and /target/generated-sourceetc along with a module.jar.
On the other hand the local ~.m2/repository would consist of module.jar along with the pom.xml for that module and all the configs(repositories, dependencies etc) to rebuild that module from if required.
