In iOS 26.3, Apple introduced a new privacy feature which limits “precise location” data made available to cellular networks via cell towers. The feature is only available to devices with Apple’s in-house modem introduced in 2025. The announcement1 says https://support.apple.com/en-us/126101 ↩
I believe it is for beam forming (the tower needs to know where to send the signal)
But it does not work when GPS is disabled on your phone. So, it normally has to work without it.