Do funds for the Thai marriage visa need to come from abroad, or can they be deposited in a Thai bank?

I think you are confusing TWO separate ways you can show proof of funds for a marriage visa/extension.

One way is all banked money and that's where you bank 400K baht in a thai bank account in your name only

The other way is monthly income and (if you don't work here and can't get the embassy letter) that's where you transfer IN to the country to a thai bank account in your name only a minimum of 40K baht a month each month every month for the previous 12 months before you apply for a year extension.

That means you cannot use monthly income to get the initial 90 day non-O visa because you don't have 12 months of transfers your only option is banked money method for the 90 day Non-O and the first year extension,

AFTER that you can use monthly income by bringing in the 40K a month for the next year and get your subsequent extension the following year that way. if you want

There is nothing in the immigration rules that states the 400K baht banked money method of proof of funds has to originate from abroad.

It can come from inside the country

What you can't do is use the 40K baht a month monthly income method with domestic transfers unless you're legally working here with a valid work permit.

If you are using the 40K baht monthly income method (and you don't legally work here, and you don't come from a country whose consulate issues the affidavit of income from abroad notary letter) you HAVE to transfer that 40K from abroad into a thai bank account in your name only each month, every month for the previous 12 months before you apply for an extension.