I think I understand the effect that qualified and unqualified have, from answers in Set XML element to no namespace in XSD?
If I did for some reason want there to be descendent elements in no namespace, I would specify elementDefaultForm="qualified" and use xs:import to import the definitions for those elements, and require XML documents to be explicit about the elements being in no namespace.
But, did someone see a need for locally defined elements to be treated differently with respect to namespaces, than globally defined elements? What was that use case?