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I have changed the SecurityTokenServiceApplicationPool to run under the localsystem built-in account, so my question is whether specifying a built-in account s for the SecurityTokenServiceApplicationPool is a recommended approach?

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It is highly recommended Security token Services should run the services account( i would prefer under farm admin) not under the local system account.

You know STS is very important services application and run on every server in the farm.

This account is used as the identity for the service application endpoint application pool. This account must be the Farm Service Account and the SharePoint Products Configuration Wizard automatically creates the application pool.

http://technet.microsoft.com/en-us/library/cc263445(v=office.15).aspx

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