There is nothing that suggests that granting applications access to the content of your photos also grants them access to your current location.
Facebook and Twitter also makes available the location of your photos. Is there a particular reason you are singling out Path? I hope it's not a stretch to assume this is a page view grabbing technique.
Twitter respects the geolocation setting, and strips the exif location data from photos when serving them. Whether or not they do this before upload is unknown, but pictures posted to Twitter from the iOS app do not include location data when geotagging of tweets is disabled.
The reason I'm not picking on them is because neither of them (Twitter due to Doing The Right Thing, Facebook due to lack of opportunity) have published my private data in express violation of my wishes. Path did so today.
Regardless, despite missing this warning, I'm a technical user and know about EXIF data. The real issue is Path ignoring my explicit demand that it not track my location.