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According to the documentation at:
With a self-hosted runner you can use a custom docker-in-docker service.
"The 'services' section in your bitbucket-pipelines.yml file contains a custom docker service. Remove 'image', 'variables' and 'environment' from the docker service definition or use a self-hosted runner for the step."
name: Build Deploy rev-proxy
- ping localhost -c 1
The runs-on parameter in the yaml file must contain a label named self.hosted. I believe that culprit here is that your yaml file has only the mylocalrunner label, so Pipelines doesn't see that step as a step that will run on your local runner.
You can modify the runs-on parameter as follows:
and this should allow the step to run on your runner. The label mylocalrunner should also exist on the runner you configured on Bitbucket website either from the repository settings or from the workspace settings.
Please feel free to let me know how it goes and if you have any questions!