BFD works only for directly connected neighbors. BFD neighbors must be no more than one IP hop away. Multihop configurations are not supported -> "BFD detects local link failure" is correct.
Typically, BFD can be used at any protocol layer. However, the Cisco implementation of BFD for Cisco IOS Releases 12.2(18)SXE, 12.0(31)S, and 12.4(4)T supports only Layer 3 clients, in particular, the BGP, EIGRP, IS-IS, and OSPF routing protocols.
Reference: https://www.cisco.com/c/en/us/td/docs/ios/12_0s/feature/guide/fs_bfd.html

Locator ID Separation Protocol (LISP) is a network architecture and protocol that implements the use of two namespaces instead of a single IP address: + Endpoint identifiers (EIDs)-assigned to end hosts. + Routing locators (RLOCs)-assigned to devices (primarily routers) that make up the global routing system.
https://www.cisco.com/c/en/us/td/docs/ios-xml/ios/iproute_lisp/configuration/xe-3s/irl-xe-3s- book/irl-overview.html

CoS value 5 is commonly used for VOIP and CoS value 5 should be mapped to DSCP 46. DSCP
46 is defined as being for EF (Expedited Forwarding) traffic flows and is the value usually assigned to all interactive voice and video traffic. This is to keep the uniformity from end-to-end that DSCP EF (mostly for VOICE RTP) is mapped to COS 5.
Note:
+ CoS is a L2 marking contained within an 802.1q tag,. The values for CoS are 0 7
+ DSCP is a L3 marking and has values 0 63
+ The default DSCP-to-CoS mapping for CoS 5 is DSCP 40