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Technicality that the llm doesn’t, but the function it calls it there does.
That means that functionally the LLM has access to your location.
The tool needs to be running on your device to have access to the location, and apps can’t/don’t really call each other in the background, which means the chat app has access to your location, which means the LLM can request access to your location via the tool or the app can just send that information back to home base whenever it wants.