I would start with the assumption that Google is collecting and storing every single possible data point about every single thing you share with them, including this. I have zero doubt that they store this info privately for their own use.
Each photo's geolocation data is stored. Of course.
It is shown in the UI, as well as indexed so you can search by location.
For example, I can search for "photos of dogs in Portland" and it'll show all the pics of dogs I've taken in Portland.