Location Services works by asking Apple if it knows the location of any of WiFi access points near you.† Apple knows these locations by using services like Skyhook who wardrive around mapping locations of BSSIDs (AP mac addresses).
So, when Location Services is on (which it is by default), macOS will periodically switch your wireless card to monitor mode to find those nearby WiFi access points. Doing so stops normal network traffic for around a few 100 ms on the device.
† On devices with a GPS (i.e. iPhones and iPads) it will also sometimes use the GPS, but does so sparingly because the GPS uses much more power.