Answer
How accurate is the GPS location in a photo?
Outdoors with a clear sky, usually within a few metres — precise enough to name the building you were standing in. Indoors it can be far worse, or simply wrong.
Updated
A phone with a good satellite fix records coordinates accurate to somewhere in the region of five metres. In practical terms that identifies a house rather than a street, and it is why geotagged photos are such a reliable way to locate someone. Many files also record altitude and a compass bearing, which together narrow things down further — not just where you stood, but which way you were facing.
Accuracy falls away indoors, in dense city blocks and under heavy cover, where the device leans on wifi networks and cell towers instead of satellites. That can still be good, because wifi positioning in a well-mapped city is often accurate to a building. It can also be badly wrong, landing the coordinates on a neighbouring address or on a tower some distance away.
The practical upshot for privacy is that you should assume the coordinates are good. Planning around the possibility that a fix might be inaccurate is planning around luck, and the failure mode is that the one photo with a clean fix is the one that gets published.
The upshot for the opposite question — using metadata to establish where a photo was taken — is the reverse. A single fix is not reliable enough to build a conclusion on, particularly indoors, and coordinates can be rewritten trivially in any case.
If you want the location gone but the rest of the file intact, the GPS remover takes out the location block and leaves everything else in place.
More on this: GPS location remover.