Right, so Google end up with the IP address of the NAT gateway that my mobile provider puts me through. Hundreds, if not thousands, of other people will be sharing the same gateway.

In addition, DNS doesn't send my GPS co-ordinates along with the request, so it will just be IP geolocation data which Google will collate for their own stats on their DNS servers (So they can see/log what regions people access from, etc.).

Just because it mentions storing location doesn't mean they are trying to monitor every step you take when using their DNS.