If you enable that, you can save locations, so that, for example, you can "favorite" your home and your office for easy access.
If you disable activity tracking, you can't save anything.
Those two are totally unrelated, and you're still using Google Maps through your Google account, so there are 0 technical reasons they couldn't just persist your saved locations in the Google Cloud.
They just don't do it to force you to let them track your location.