Apple broke their silence today and responded with a Q&A press release - HERE - That answers many questions about the Location Data being cached on your phone. Bottom line - this was a bug and your exact location was never being tracked (which the later was obvious if you looked at the data). Here is what Apple plans to do:
Sometime in the next few weeks Apple will release a free iOS software update that:
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reduces the size of the crowd-sourced Wi-Fi hotspot and cell tower database cached on the iPhone,
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ceases backing up this cache, and
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deletes this cache entirely when Location Services is turned off.
In the next major iOS software release the cache will also be encrypted on the iPhone.
I will go over the entire PR on the next episode along with many of the other stories and any items not covered by the PR.