When you "create a client only package" the intrinsic database is running on the client, so nothing point to the server. A external data source is always external regardless of the app type.
What type of a LightSwitch Application you've selected?
- A 2-tier desktop application runs on an end-user Windows desktop. The database and server components are deployed to the end-user computer.
- A 3-tier desktop application runs on an end-user Windows desktop. The
database and server components are deployed to an Internet
Information Services (IIS) server or to Windows Azure. - A 3-tier Web application runs in an end-user web browser. The database and server components are deployed to an Internet Information Services (IIS) server or to Windows Azure.