The Customization manual (section 5.2.1.1 for LyX 2.0.3) tells you how
to use local layouts, but it doesn't tell you how to remove a local
layout which, after testing, you decide is not what you want and the
original layout should be reinstated. My instinct was to erase
everything in the local layout window, press the Validate button and
then the Apply button, but it had no effect.
The critical thing, to erase a local layout, is to leave the Format 35
line but erase everything else, then press Validate and Apply. After
that you can also delete the lonesome Format 35 line. I think there
should be another line or two added to the section in the Customization
manual explaining this, since not all one's local layout experiments are
going to prove successful.
Andrew