Is this really an issue when both iOS and Android support "only when using app" permissions for location? If you don't want give them access to background location, then don't grant the permission.
They also can't get your IP address when you are not using the site, so it is the same thing.
But you can turn it off:
https://www.asurion.com/connect/tech-tips/conserve-phone-dat...
See under the apps battery options
Thats about 99% of the reason my phone is always using a VPN.
Sure, geolocate my IP. I'm in Melbourne. Accurate to an almost 1000km CEP...
By using countermeasures, you're demonstrating that you are more privacy-conscious and/or more tech-savvy than the average. This means you are more likely to be a problem when they try to swindle you in one way or another down the line, whether it's the next dark pattern that they want you to fall for or try to scam you and hope you just accept your fate instead of raising a chargeback, etc.
There's no reason for them to accept even a sliver of risk as long as there's an endless supply of people who don't carry said risk, therefore any indicator that you deviate from the average could lead to a ban, especially if the margins are super-thin or non-existent (when the objective is "engagement" rather than profit).
Now I doubt any of this has been started intentionally - most likely the anti-abuse mechanisms learned over time the correlation between different signals such as usage of a VPN, etc, but because of the above there's also no pressure to "fix" this problem for legitimate users of VPNs.