Hello @Anukalp S ,
>> Actually subnets under prefix list are being learned through its connected routerA
Does this mean the local device has two BGP neighbors ?
In any case, in route filtering the most specific command wins : so BGP neighbor x.x.2.2 will receive only the prefixes allowed in the prefix-list named LOCAL, regardless of how many connected subnets exist on the local node.
The question on what happens first between redistribute connected and a neigh x.x.2.2 prefix-list LOCAL out is not so important.
Redistribute connected is a way to locally inject prefixes in the local BGP table.
Only best paths can be advertised so the local BGP table or RIB is prepared first.
Then for each BGP peer that share the same outbound policy an update group is created ( a sort of implicit peer-group) and the set of NLRIs to be sent is prepared by processing all the available prefixes via the route filters applied to the specific neighbor(s). This creates the outbound RIB for that update group / neighbor.
I agree with @pman that using the network command can provide more control and a better origin code ( i instead of ?).
Hope to help
Giuseppe
