Location Services being on systemwide sends your location 24/7 to Apple. It's not just GPS reception, it also uploads the list of wifi MAC addresses it can see, with signal strengths, to improve its location fix.
Is this confirmed or are you just saying it because it's technically possible?
Edit: Yes, this is confirmed in Apple's privacy policy for location services.
"If Location Services is on, your iPhone will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers (where supported by a device) in an anonymous and encrypted form to Apple, to be used for augmenting this crowd-sourced database of Wi-Fi hotspot and cell tower locations."
Edit: Yes, this is confirmed in Apple's privacy policy for location services.
"If Location Services is on, your iPhone will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers (where supported by a device) in an anonymous and encrypted form to Apple, to be used for augmenting this crowd-sourced database of Wi-Fi hotspot and cell tower locations."
[0] https://support.apple.com/en-us/HT207056