Facebook is a model of offering incredible, nuanced privacy protections to its users, allowing them to configure exactly how much of their data they want to share and how they want it to be used -- Facebook offers these protections, it just doesn't deliver them. Every Facebook privacy setting seems to be an empty checkbox, not hooked up to anything that alters its data-collection.
Aleksandra Korolova took several steps to tell Facebook not to track her location: she turned off Facebook's access to her Iphone's location data in the relevant Ios control panel, and cleared and switched off "Location History." She does not list her city in her Facebook profile and does not post photos. She turned off location access and declined to state a location for Whatsapp, Facebook Messenger, and Instagram. She doesn't tag her location in Facebook posts and doesn't check in to locations when she gets there.
But Korolova still sees ads for businesses near her home and work, and the places she travels to, which are labeled as being shown to her because she was "recently near their business."
Korolova cares about this stuff in part because she's a researcher who published a paper that showed that stalkers can use Facebook's ad-location services to track people to areas as specific as a single house.
Based on Facebook's marketing materials for advertisers, Korolova thinks they're deriving her location from her IP address, cell-site data, nearby wifi networks and Bluetooth spotting.