Coming to add a post I opened not realizing this was already requested. Just a copypasta from the OP:
I know this is doable with root and other mods, and it could be beneficial in preventing applications from tracking you further.
We currently only have the ability to use approximate/precise, as well as a GPS mock location. The problem is, apps can detect and block this entirely, meaning we cannot protect ourselves from giving away our exact location to apps that demand it. It would be nice to be able to top them by giving a pre-selected location to use that does not change (or roams around a tiny bit in that area to increase masking).
Additionally, perhaps blocking location except when in a specified geofence. For example, amusement parks that have apps for maps and ride wait times. I wouldn't mind sharing location while at the park, but once I leave that should be cut off. If this was automated, that would be fantastic. Either switch back to blocking until within the said geofence, or give a default generic "home" location when outside of the geofence.
I know some may argue that this can be abused (like all great things), but if you can already abuse it with a rooted phone, why shouldn't legitimate use cases be made valid as well while also protecting the user?