Actually, to me it sounds like a bug with Swype when location access is blocked. The users in the thread with the large amount of requests all have the location permission blocked.

Other users with Privacy Guard installed as well (so they can see the amount of location requests) who have not blocked location access report that it only made the request once.

So it just sounds like if it fails the initial request it continues to retry every few minutes. In my opinion it seems like a bug rather then anything malicious.

However the posters in the thread do have a good point that there is really no reason for Swype to even need this permission.