As I understand it, qcasey, location requests will only be significantly rerouted through Play Services if these following conditions are met: the "Reroute..." toggle is disabled, Location is allowed "All the time" + Precise with Play Services and so is the Nearby Devices permission, the Location Accuracy toggle is enabled, and the WiFi and Bluetooth scanning toggles are both enabled.
So, no, I don't think any notable rerouting is occurring. The usage guide makes it clear that, even if Play Services are granted the aforementioned permissions, it's useless without Location Accuracy. It sounds like some amount of location work is happening, though, and I suppose the battery life could be slightly impacted.
Hope this helps.