Compiling the following program:

public class X {
    @interface A {
    }

    @A
    <T extends X> T id(T t) {
        return null;
    }
public static void main(String [] args) {
        
        @A
        <T extends X> T id(T t) {
            return t;
        }

        X x = new X();
        X i = id(x);
        System.out.println("i = " + i + " x = " + x);
}
}

results in:

X.java:12: error: illegal start of type
        <T extends X> T id(T t) {
        ^
X.java:12: error: > expected
        <T extends X> T id(T t) {
           ^
X.java:12: error: not a statement
        <T extends X> T id(T t) {
                    ^
X.java:12: error: ';' expected
        <T extends X> T id(T t) {
                       ^
X.java:12: error: ')' expected
        <T extends X> T id(T t) {
                            ^
X.java:12: error: not a statement
        <T extends X> T id(T t) {
                             ^
X.java:12: error: ';' expected
        <T extends X> T id(T t) {
                              ^
7 errors

See that the instance method is annotatable while the local method is not.