I know you didn't personally design it so I'm not asking you these questions, more just thinking through this (although anybody knows the answers I'd appreciate hearing them so I can be more informed).
Why does this need to be built in at such a low level that not even flashing a new OS can see it/stop it? Why can't it be something users can opt in to, or at a minimum opt out of? Whether sinister or not, it's a "call home" mechanism built into to the lowest levels of the hardware, an area where users are powerless, even though they "own" the device.
You can remove the services that download the extra GPS data, nothing stops you from doing that, aside making GPS unusable :)
Nobody has shown evidence of that. The article certainly didn't
It's done by the ROM, at the OS level, not the chipset. Some custom ROMs will proxy this request to mask your IP.