Well, any correct time handling library will use something like the IANA timezone database (aka tz/tzdb/zoneinfo) which stores all the changes in timezone rules

Well, any correct time handling library will use something like the IANA timezone database (aka tz/tzdb/zoneinfo) which stores all the changes in timezone rules for localities over the years - a library that only knows "today's rules" would be fundamentally broken as you say. So the internals of toLocalDisplayString(timestamp, timezone, calendar, locale) should look up the appropriate rules in effect at the timestamp and use those to decide the local time to display.