You can stop Google Play Services having your location by disabling the network permission for it. That permission is disabled by default and only enabled if you enable it yourself.
Google Play Services is sandboxed like any other user installed app on GrapheneOS, so you can handle its permissions like any other app.
By default, location requests are not sent via Google Play Services. Instructions to enable that functionality are given here: https://grapheneos.org/usage#sandboxed-google-play-configuration
If you ever set that up, you can simply reverse those steps to switch back to the standard OS location service.