...I worked in the mobile industry for years, for many cellular manufacturers, programming mobile devices, and testing them for on-boarding with the carriers. The one thing that seemed to be a standard across the board with most Chinese manufacturers, I won't name names due to non-disclosure agreements, is that location services was turned on in the EPROM whether it was off in the UI or not. So, Chinese devices failed location services tests almost every time, and the carrier would send the device back. The "bug" would be fixed, tested with QXDM or other diagnostic tools, and then submitted as fixed. Then when the next version of software was put out the "bug" would be back, and it would have to be fixed again. This was never the case with Japanese, Korean, or American manufacturers...only the Chinese manufacturers. For this reason I won't buy cellular devices manufactured in China. If I turn my location services off I want them off period!
If they are doing that with LBS think what they are probably doing with the rest of the data on your device. Credit Card info, Banking info, personal data, etc. nothing is safe...or as safe as it can be in this world.