During translation of source text to a C program, the source text goes through several phases. It turns raw bytes into preprocessor tokens, then preprocessor tokens get expanded into more preprocessor tokens and then preprocessor tokens get translated into C tokens, which are fed into the C parser. There is no “expanded text”, only expanded tokens. Generally this is implemented as a state machine that produces tokens on demand, so there is no expanded text. When GCC shows you that error message, it uses the recorded source location and looks it up in the original source file. This is trivial to do. Expanding just one line of the source file would either require re-invoking the preprocessor from the beginning or storing already consumed preprocessor tokens.
Obviously this is possible, but no one has gotten around to implementing this feature and it’s not clear you would want either solution: buffering preprocessor tokens in case you need to expand a line for an error message greatly increases memory usage and the vast majority of compilations are successful ones with no errors, slowing down the normal case. And re-invoking the preprocessor to show you one line on every error message makes error reporting slow.
Obviously this is possible, but no one has gotten around to implementing this feature and it’s not clear you would want either solution: buffering preprocessor tokens in case you need to expand a line for an error message greatly increases memory usage and the vast majority of compilations are successful ones with no errors, slowing down the normal case. And re-invoking the preprocessor to show you one line on every error message makes error reporting slow.