Local omnibox treats navsuggest suggestions as queries.

chrome/browser/ui/search/instant_controller.cc

Index: chrome/browser/ui/search/instant_controller.cc
diff --git a/chrome/browser/ui/search/instant_controller.cc b/chrome/browser/ui/search/instant_controller.cc
index 83f1e345833a15ef85e88f0bd2df06d9dfbae3a5..d3094df617b3bac97d6919b9a537c9c3c5df9281 100644
--- a/chrome/browser/ui/search/instant_controller.cc
+++ b/chrome/browser/ui/search/instant_controller.cc
@@ -572,8 +572,11 @@ void InstantController::HandleAutocompleteResults(
       result.type = UTF8ToUTF16(AutocompleteMatch::TypeToString(match->type));
       result.description = match->description;
       result.destination_url = UTF8ToUTF16(match->destination_url.spec());
-      if (from_search_provider)
+
+      // If the search query should be displayed.

[samarth, 2013/04/17 00:39:13]

nit: this comment isn't very useful.  How about something like "Setting the
search_query field tells the Instant page to treat the suggestion as a query." 
Or you could just leave this out altogether.

Ideally we'd test this function directly by passing in a list of matches and
checking the "output", but that's not really feasible today.

[dougw, 2013/04/19 01:11:09]

Done.

+      if (AutocompleteMatch::IsSearchType(match->type))
         result.search_query = match->contents;
+
       result.transition = match->transition;
       result.relevance = match->relevance;
       DVLOG(1) << "    " << result.relevance << " " << result.type << " "