It is apparently used for emergency location https://discuss.grapheneos.org/d/746-imsservice-system-app-accesses-location-consistently

The whole point is deliberate engagement and sharing. Don’t like the content coming out of an instance? Don’t federate with them. It allows communities to stay small and focused, or grow large and be a big tent, according to their users.

That’s a choice they can make for themselves, not a choice tech companies and governments should make for everyone. If they want to trade their privacy, and I don’t - fine. All I want is the power to choose and know that choice will be respected.