It's a privileged app ( a service in Android lang ) that once fetched sends the data to the modem, where GPS is actively implemented, and augmented by such extra data.
Android, being built on top of Linux which contains Netfilter as I explained elsewhere [1] which allows you to block network access no matter whether the data originates from some hardware chip or somewhere else. The only way data could make its way off the device is if the radio firmware made a covert connection to Qualcomm which could be used to totally bypass the Linux kernel. That connection would not use the system IP stack and it could work even if the user does not have data active. It would need cooperation from network operators (all over the world) to get the data out of the carrier's network to Qualcomm. This is not what this article is about, it is quite possible that the likes of the NSA are up to this type of shenanigans since they may be able to force carriers to do their bidding [2] but Qualcomm is just another corporation looking to 'get to know their customers'. Read the article and you'll see that the data is exfiltrated through Android. A default block for outgoing data - like I use - blocks this just as well as it blocks other similar attempts.
[1] https://news.ycombinator.com/item?id=35707645
[2] https://www.pbs.org/wgbh/frontline/article/how-att-helped-th...