They give it to a third party - other chrome users. I was once in a train, and location services located me in a suburb hundreds of km away - clearly I was traveling with someone living there, using a portable/mobile hotspot. These kind of edge cases are hard to prevent (and rare), but still can lead to serious fines.
Your example doesn't demonstrate Google giving the data to other Chrome users. Making decisions based on the data is not the same as giving the data out.
