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GrapheneOS This does not break the anonymity of a VPN.
Yes it does, if GrapheneOS proxy is compromised. If all services where secure and trusted, you wouldn't need to use a VPN for anonymity. Each service would protect your anonymity, and HTTPS during the transport. We use VPNs for anonymity, specifically because we acknowledge any service might be compromised or forced to hand over logs at any time.
Claiming a VPN still provides anonymity, because the location request is encrypted with HTTPS to a pinned certificate, would assume ultimate trust or inability for the GrapheneOS proxy server to be compromised, legally or technically. This is simply not a reasonable assumption to make.
GrapheneOS Your claim would also apply to using online maps app to search for a route from your house to somewhere else or giving location data to any other service.
Yes! It would! You mustn't reveal to the other end of the VPN what your physical location is.
That is why you never put apps that reveal your identity over a VPN. That is why you always let banking apps, map apps, real-life social media apps and so on go out to the network directly, without going through any VPN. As it would ruin your anonymity is you let those go over the VPN. And it would be pointless to make them go over the VPN anyway, as those services would know anyway exactly where you are or who you are.
This is a key point in compartmentalizing ones life into security domains. Your anonymous activity must not be mixed with your real life activity in any sense.
GrapheneOS We're very clear about how network location works and it's not enabled by default so there is no need for concern about this. It will also support offline usage which is being actively developed.
I have been thinking some more about this. Actually, it is like you are implicating not only the network location provider service that has this issue. Any app with access to your location, that is, any app with Location or Nearby Devices permissions, might leak your location. So, the only safe way is to disable location functionality completely in the profile where you have your anonymous activity and your VPN. When I think about it, I guess most people with serious anonymity needs would actually disable location services. It is asked for during setup wizard, and it is easy to understand that location would conflict with anonymity goals. So maybe a warning for the network location provider functionality is not as important as I was initially thinking.
It might still be a risk, if the user uses the owner profile for the anonymous activity, and a secondary user profile for the non-anonymous activity with location enabled. Because as far as I understand, in this case, the location requests from the non-anonymous user profile will still be bridged onto the VPN in the anonymous user profile, which might be totally unexpected and non-obvious.
But even then, I guess most users would naturally not choose to use the owner profile as the anonymous one, as one often want to have the anonymous one more locked away than the non-anonymous one. Still, I do think all this is worth thinking about. That location requests gets rerouted to the VPN of another profile might also be considered unexpected.
Usable security.