So one of our packagers just brought this to my attention and I tested the scenario and it is sound - in 8.8 there are two options in Distribution Packages - LocalSystem and Current User. In the old days sdclient I believe would only elevate rights when needed (e.g., user running the policy was not a local admin). In 8.8 when LocalSystem account is checked it ALWAYS uses the localSystem account regardless of the rights of the current user.
The question is - Is this a bug or working as designed? I would have to say I like the old way better. Just trying to figure out if this is an ER or a trouble ticket.