The location of your phone is always known by the network to at least as close as the neares mast, and at most times is in contact with three masts. The strongest available signal from one of the contactable masts is used except when that mast is already fully loaded.
One would expect the phone company to know the physical location of each mast, and so from knowledge of which masts you are near and by comparison of signal strengths thay can get rough idea of where you are. They always could.
Out of doors in an unpulated area the strength of signal cmparison can be pretty accurate. In a bulit-up area the bulidings interfere with the signal strengths and so is less reliable, but also many more masts with lshorter ranges are used in built-up areas because there are more phones to serve and each mast can only handle a limited number of calls. (This is because of the fundamental physics, not a technological limitation. Dividing the country up into a large number of short-range cells is exactly how it all works.) So in built-up area even though the strengths might be all to pot, you usually have to be nearer a mast to get access.
Usually this only works to one or two hundred yards and sometimes can be out by a mile or so, but that might well be enough for some purposes. (Eg wife says she's in Bradford visiting sister, but in fact in Leeds with some other bloke.)
So just for the phone to work you have in effect given the phone network consent to identify the general location of your phone, and by implication yourself. Keeping your location secret from the mobile phone company, (or at the very least the equipment they operate) is impossible. That's how it works.
The GPS locator in some modern phones is only supposed to operate when emergencly service calls are made. At least that's the idea. Unilke public call boxes etc, where the geographical location of the phone is instantly known, calling emergency services on a mobile can be problematic. The caller may not know the name of the street etc. So being able to locate the phone within a few metres is very useful indeed.
As for abuse.... If a technological system has the potential for abuse it will be abused.
None of these work of course if the phone is turned off. So if your'e cheating on your partner, turn the phone off!
