I would not write large local functions at all. I would leave them top-level but do not export them. This also allows to test them from GHCi.
The downside to this is when you want to use the worker/wrapper transform in order to capture some local variables for a recursive function, instead of passing them through the recursion.
I do this a lot too, but it doesn't mean you have to have large functions. The type of the worker is usually pretty trivially derived from the type of wrapper, e.g. wrapper :: A -> B -> C -> D wrapper a b = go 0 where go n c = .... I've had a couple of cases with large functions with large numbers of parameters that have a complicated recursion pattern and those are indeed hard to factor into top level functions because each internal definition uses a random assortment of variables (not necessarily worker/wrapper either). I suppose a refactoring editor could pull inner definitions up to the top level and push them back down, but hopefully those hairball functions are not common.