Yeah, its an overcomplicated, breakable solution. Just decide the minimum safe uncertainty, assign grid cells that provide it, and only report distance quantized to grid cells.
Every time this comes up a hundred people decide you "just" need to quantize, and that does help but is still vulnerable in multiple ways, including if you have low "valid location" density (think a grid cell that is 95% water) or if you're on a boundary and flip between two cells. It's easy to mitigate the normal case but takes more thought to mitigate the edge cases.