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The SQL Server Service runs under the account of the computer. The SQL Server Service has access to network resources, but under the context of the computer account not under its own account. The SQL Server Service runs under the a service specific account called NT Service\MSSQLSERVER.
Service properties and configuration. Startup accounts used to start and run SQL Server can be domain user accounts, local user accounts, managed service accounts, virtual accounts, or built-in system accounts. To start and run, each service in SQL Server must have a startup account configured during installation.
After the Services window displays, scroll down to locate the service called SQL Server (INSTANCE NAME). Scroll to the right to find the name of the account listed under the column "Log On As" (see the screenshot below). This account is your Service Startup Account for SQL Server.
It won't break anything, but it's also completely unnecessary and actually discouraged by Microsoft. Domain Admin gives your SQL service far too many rights it just doesn't need.
You cannot use NT AUTHORITY\LOCAL SERVICE. Also you cannot use a local account.
The recommended way is to use a domain account. Next best thing is NT AUTHORITY\NETWORK SERVICE.
I prefer to make a dedicated local account for SQL Services with no special rights, then let the SQL Server installer grant only the necessary perms to that account. It feels safer.
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