This is an OS privacy bug, and isn't specific to Facebook. If an app does not have location permissions, it should not receive the geolocation portion of photos' EXIF metadata.
Well of course, but we all know Facebook isn't a responsible company and Apple shouldn't assume that every app in its store is made by a responsible company.
They're currently in court arguing about how they make users safer by curating the available software. Issues like this don't reflect well on that argument.
They could fix the problem regardless of whether the app was downloaded from the app store, a third party store, or just sideloaded, so I don't see what you're getting at.
It sounds like you are saying this issue is irrelevant to the App Store.
So how can it reflect badly on their case?
The way it reflects well, is to notice that this is a small hole in their privacy measures which can easily be fixed, and the only reason we are talking about it is that for the most part their privacy controls work well. I.e. it demonstrates their seriousness about privacy.
Any bug/feature Facebook uses is also technically available to other apps on the platform, Facebook does not have privileged or first party access to the platform after all.
The only difference is their size and capability to retaliate as compared to any other App developer.
I don’t think that’s a sufficient fix though. E.g. many people may enable location sharing to messenger for legitimate uses like meeting up with friends in public places, and for a “15m of location shared to friend” feature they would need to turn location sharing up to at least the “allow while app is running” setting, but people doing that would surely not also intend for the app to also get the location of every photo they send to their friends (including photos that the OS(?) automatically tags with the current location when they are saved)
I'm not a privacy engineer, but the way I would expect it to work is that if you turn on location sharing for "while the app is running", then the app should get EXIF location data only for pictures you take while the app is running.