Will it show when Google themselves though are using it?
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At least on GrapheneOS it does, which means when you have any number of apps using the play services location service, it's basically on all the time, and I can't fucking turn it off.
You can take away the location permission for gservices afaik. Maps still works without it, resorting to good ole GPS if I'm not wrong.
Sure, but my issue is the location indicator being on all the time. Denying it to play services just shifts the problem (and will probably cause app issues and extra battery drain).
You're having GPS on all the time and worry about battery drain when disabling it? That does not make sense mate.
It does with the green camera/microphone indicator dot. I'd expect the same.