I think the Google Maps annoyance after activity tracking is disabled is designed intensionally. To force users to give up the control with easy to click buttons.
However, having worked at other parts of Google (not on Maps or location stuff), I'd guess at a much more prosaic explanation than that kind of conspiracy: the product managers / engineers / tech writers / UI designers don't want to maintain the complexity of both code paths and UX flows indefinitely if most users are happy to share their location server-side in exchange for the conveniences and features that enables.
You and I aren't happy to do that, but we on Hacker News aren't representative of most consumer-product Google users.
Huh? Google Maps works fine for me despite having disabled location services. It nags me nearly everytime I open the app to "enable location services to proceed", making it sound as though it is required, but I just click "No" and get on with it. Haven't noticed any missing features.