[step:Use local maximality to keep the bracket orbit inside an isolating neighbourhood]
Assume now that $\Lambda$ is locally maximal. By definition, there exists an open neighbourhood $U \subset M$ of $\Lambda$ such that
\begin{align*}
\Lambda = \bigcap_{n \in \mathbb{Z}} f^n(U).
\end{align*}
Since $\Lambda$ is compact and $U$ is open, choose $\rho>0$ such that
\begin{align*}
\{q \in M : d(q,\Lambda)<\rho\} \subset U.
\end{align*}
Decrease $\varepsilon_1$ so that $\varepsilon_1<\rho$.
Let $\varepsilon \in (0,\varepsilon_1]$, choose $\delta=\delta(\varepsilon)$ as above, and let $x,y \in \Lambda$ satisfy $d(x,y)<\delta$. Put $z=[x,y]$. Since $z \in W^s_\varepsilon(y)$, the defining property of the local stable plaque gives
\begin{align*}
d(f^n(z),f^n(y))<\varepsilon
\end{align*}
for every integer $n \ge 0$. Since $y \in \Lambda$ and $\Lambda$ is $f$-invariant, $f^n(y)\in\Lambda$ for every $n\ge 0$, hence $d(f^n(z),\Lambda)<\rho$ and $f^n(z)\in U$ for every $n\ge 0$.
Similarly, since $z \in W^u_\varepsilon(x)$, the defining property of the local unstable plaque gives
\begin{align*}
d(f^{-n}(z),f^{-n}(x))<\varepsilon
\end{align*}
for every integer $n \ge 0$. Since $x \in \Lambda$ and $\Lambda$ is $f$-invariant, $f^{-n}(x)\in\Lambda$ for every $n\ge 0$, hence $f^{-n}(z)\in U$ for every $n\ge 0$.
Combining the forward and backward inclusions gives $f^k(z)\in U$ for every $k\in\mathbb{Z}$. Therefore
\begin{align*}
z \in \bigcap_{k \in \mathbb{Z}} f^k(U) = \Lambda.
\end{align*}
Since $z=[x,y]$, this proves $[x,y]\in\Lambda$ in the locally maximal case.
[/step]