The default save location for TextEdit (and other apps that can store documents on iCloud) is iCloud. It takes a few clicks if you want to expand the save dialog and save a file locally. There is no way to change this in the GUI, but if you run the following command in Terminal, this will set the default save location to On My Mac for all iCloud-compatible apps:
defaults write NSGlobalDomain NSDocumentSaveNewDocumentsToCloud -bool false
To change this back to the default, run this command:
defaults write NSGlobalDomain NSDocumentSaveNewDocumentsToCloud -bool true
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