Unfortunately as of a update made a while ago, LocalScripts can’t run in the workspace. You need to put it in either StarterPlayerScripts, the Backpack, the Character, or StarterGui for it to run. This is a bit frustrating to work around, but it is very possible to shift LocalScripts to work from one of the working LocalScript locations.
Another option would be to use a Server Script, if that is a possibility for what you are trying to accomplish. A normal Script can be placed pretty much anywhere, except for local directories.