The implementation details are sketchy/weak in all sources I can find, but I don't think it's pure (coordinates based) location tracking, but rather a "feature" that will show which WiFi network you're connected to as your Teams status. It's pitched as "what building you're in at the office," which seems like a stretch.
It's also kind of unclear whether the blog post is correct that it would show the name of another network if you connect to it - I'd sort of assume it would just show "Out of Office" instead of "connected to YO_MAMAS_WIFI" or whatever, but who knows.
It's also kind of unclear whether the blog post is correct that it would show the name of another network if you connect to it - I'd sort of assume it would just show "Out of Office" instead of "connected to YO_MAMAS_WIFI" or whatever, but who knows.