As Celt83 mentioned, the lower Sy will give you the stress at the tip of the flanges and the higher Sy will give you the stress at the web. The stress will be higher at the tip of the flanges since it has a lower Sy and σ = M/S. (The Dimension and Properties tables in Part 1 of the Steel Construction Manual only list the lower Sy value.)
For the Yielding check, the maximum stress anywhere in the shape is what is critical since that is where yielding will initiate, so you use the lower Sy.
For the Flange Local Buckling check, the maximum stress in the flange will be at the toe of the flange, which can be determined using the lower Sy.
I would suspect, though, that the Flange Local Buckling check is only accurate when the toes are in compression. Flange Local Buckling occurs due to compressive stress, and when the toes are in tension, the compressive stress in the flange is only in the region that is right next to the web which braces the flange. (The compressive stress for this case would also be determined using the higher Sy.)
This issue of checking buckling of unsymmetrical shapes also comes up for Single Angles which only check buckling when the toes are in compression (F10.3), for Tees which only check Local Buckling of Tee Stems when the stem is in compression (F9.4), and for Tees which only check Flange Local Buckling when the flange is in compression (F9.3). (The Flange Local Buckling check for Tees actually adds a Sxc variable for its check instead of Sx to make it clear that the higher S value gets to be used.)
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