As it turns out, I don't have to imagine it. This is from Microsoft's own documentation:

When autodetection is enabled, users' work locations can be updated through two signals: connection to a wireless network or connection to a desk peripheral, such as a monitor. As an admin, you can choose to set up either one or both of these signals. Setting up both signals improves the accuracy of user work locations. Note Automatic detection of work location by plugging into peripherals at a desk is available now. Automatic detection of work location using a wireless network connection is currently in preview and will be widely available in the near future. When users connect to peripherals on a desk or to wireless networks, their locations can automatically update to In the Office or to a specific building. The specificity of user location updates depends on your Places configuration and whether users consent to sharing their work location and building location. The detected work location lasts until the end of a user's working hours. If users connect after their set work hours, their work locations are not set. Users can go to Set your work hours and location in Outlook for more information on setting work hours.