There used to be a telephone exchange there between Adelaide and Perth 100+ years ago. I think the theory is that the time zone was there to prevent confusion at the exchange, especially since they would otherwise have sunrise at like 4:20am. Since there are only three or four communities there they have kept the local time zone and use it for local business. It has an official code (ACWST), but it is not officially recognised by the West Australian government nor the Australian government when it comes to timing things for government purposes.

It’s also used by a single town on the South Australian side of the border.