https://www.abc.net.au/news/2018-08-17/google-makes-changes-...
If this is it then I disagree completely with the ruling.
Google isn't just making an educated guess about where you are based on what you searched for... It's making an educated guess based upon what its servers are allowed to know about your query. It's unclear to me whether all the data Google collates is published anywhere public, but this includes things like originating IP address and headers sent in the request that can be inferred to be locale-relevant.
For example, looking at my own search history, Google's real certain it knows when I'm doing queries from "home" (perhaps because I told it my home location in Maps and it's correlated requests from a specific IP address with that location, perhaps because Google's fabric is huge and it can disambiguate origin of request based on where the request enters the network, perhaps because I registered Google appliances at "home" that are on the same network). Key idea is: none of those are technically "Ask the device for its GPS state and cache it," so none of them are controlled by disabling Location History.
If the Court is arguing "you can't claim you aren't tracking location by making 'location' a technical term and then combining several other pieces of state to estimate someone's geographic point of origin for a web request," I can see that argument.