Hmm, x Doubt. As I understand it mobile providers can locate phones via triangulation of signal strength, which would be independent of the phone OS. The apple blurb says

With this setting turned on, some information made available to cellular networks is limited. As a result, they might be able to determine only a less precise location

Perhaps the OS or the baseband report location to make tracking more effective in the case of only being within range of one or two towers, but those words are pretty weaselly. About the only thing this could do is turn off information apple has already been giving providers, which begs the question, why were they doing that?