Maven not respecting M2_REPO and local snapshots

Running under ubuntu, I am trying to import a local maven library. When I get the dialog and I type a partial name, it seems to only search from public repo. Under settings Maven -> Repositories, I have my home directories .m2/repository directoy defined. I also updated the local and remote repositories. Under Maven I have Always update snapshots checked and the local repository is also set on the maven screen. Any thoughts or ideas.

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