I would be curious if those that have wifi only iPads connected to a Personal Hotspot for internet get their Location updated. There is a lot of discussion about the iPads not being able to get the location. Some say Personal Hotspot won't transfer location, others say it works intermittently.
I think those cases are running into the same problem you are. Hopefully others will jump in here and provide more feedback. I believe that the Personal Hotspot will not give the location like a router does when connected to a wifi network. Devices can determine location with wifi on and with other networks in its range. Here is a Apple Support article explaining a little more on that: Updating WiFi router location in Apple's … - Apple Community.
It might be a case where you have to connect your Mac to a router based wifi network or a Mobile Hotspot. The Mobile Hotspots and those provided by Cellular companies for internet access apparently don't have the same drawbacks (or privacy concerns) as Personal Hotspot.
Keep us posted on what you find out.