The problem is that the platform.local.txt provided by the azure-iot-arduino project was written specifically for ESP8266 core for Arduino 2.5.2 and there have been some changes made to the ESP8266 core since that time. Actually the real problem is that the Microsoft developers don't seem to have taken the time to understand the basics of how the Arduino IDE works. They could have easily avoided this problem of incompatibility with future versions of the ESP8266 Core for Arduino. A bit disturbing to see this quality of work coming from the people who write the software that runs on the majority of the world's personal computers!
Do this:
Open the platform.local.txt file you saved to the ESP8266 core in a text editor.