I still haven't figured out why, but it actually requires Wi-fi be on to determine your location.
Set up a smart action while you have wi-fi on that has a location trigger. Then go turn off wi-fi and go back into Smart Actions. You'll have an error, and if you click on the rule it will show the error as the location. If you click on that, it will show "Wi-Fi must be ON for the Location trigger to accurately detect where you are located." If you turn wi-fi back on, the rule will work again.