Is there REALLY a privacy problem?
OK so Google may be collecting info about your phone and location. So what? Frankly I am quite pleased that someone, somewhere knows where I could be simply from the point of safety. The UK authorities use this to good effect when tracing missing people.
As long as my phone conversations, texts and internet content usage remains private and not monitored, I really couldn't care if Google knew the make and model of my phone, MAC or IP address , whether it was in Afghanistan or in my pocket.
If these users are so paranoid about Google intruding on their privacy, turn the phone off, don't use the Internet or whatever location tracking facilities. Don't use an Android phone or Google! It is a free world after all (for some).