Abstract A novel discrete gradient structure of the variable-step fractional BDF2 formula approximating the Caputo fractional derivative of order $\alpha \in (0,1)$ is constructed by a local-nonlocal splitting technique, that is, the fractional BDF2 formula is split into a local part analogue to the two-step backward differentiation formula (BDF2) of the first derivative and a nonlocal part analogue to the L1-type formula of the Caputo derivative. Then a local discrete energy dissipation law of the variable-step fractional BDF2 implicit scheme is established for the time-fractional Cahn–Hilliard model under a weak step-ratio constraint $0.3960\le \tau _{k}/\tau _{k-1}<r^{*}(\alpha )$, where $\tau _{k}$ is the $k$th time-step size and $r^{*}(\alpha )\ge 4.660$ for $\alpha \in (0,1)$. The present result provides a practical answer to the open problem in [SINUM, 57: 218-237, Remark 6] and significantly relaxes the severe step-ratio restriction [Math. Comp., 90: 19–40, Theorem 3.2]. More interestingly, the discrete energy and the corresponding energy dissipation law are asymptotically compatible with the associated discrete energy and the energy dissipation law of the variable-step BDF2 method for the classical Cahn–Hilliard equation, respectively. To the best of our knowledge, such type energy dissipation law is established at the first time for the variable-step L2 type formula of Caputo’s derivative. Numerical examples with an adaptive stepping procedure are provided to demonstrate the accuracy and the effectiveness of our proposed method.