I have Tor Browser and Location permissions are disabled. They can be toggled on and off and the browser is working.
Edit: I see what you mean. You mean the actual internal app settings menu option under Site Permissions under Settings in app in is broken. The actual android permission is still blocking location access. It seems like a bug in the Tor Browser app.
Edit: I don't see the app requesting location as an option in android settings even. Even If I wanted to enable it the option in grapheneos core app settings is not there. The app is not asking for Location permissions even as an optional feature.