Enough location data becomes effectively unique: There is likely only one phone in the world that averages over X nighttime hours in my apartment-complex and averages over Y workday-hours in the the same office block where I work.
That kind of pattern can be used to determine that two or more different app-identities are the same person, and anybody buying that data has a strong incentive to try it.
Which I guess is what iCloud private relay solves. But only if you pay.
So basically like a VPN or Tor? That won't defend against local code that can read location data and send it to a remote server.