I'm assuming you do have GPS location turned on, and that you're allowing location access on that page and waiting for a GPS lock before searching, correct? (And if not, how do you expect it to know where you are?)
IP addresses are usually enough to get to the right city.
I also liked the one period of time I used to type in my US zip code for Movie Showtimes and somehow be routed to theatres and showtimes in a town outside Naples, Italy. This was on a desktop, not a phone.
Not the biggest deal in the world but it seems every useful thing Google comes up with seems to degrade in quality over time and increase in complexity.
Maybe another reason for the change is that, back in the Marissa Mayer days, hiring standards used to be much more brutal. Google was still reaping the rewards of bucking the trends of web portals jammed with ads, but eventually lost its confidence in nerd-driven products and instead began to imitate Apple, Facebook, and inexplicably, Microsoft...
My personal one is that they just can't stop tweaking. It's not like there aren't some fundamental improvements with a lot of their services but everything needs to get touched and then it ends up like that car Homer tries to design in that episode of The Simpsons.
I know that you're supposed to constantly iterate and try and improve performance, design, etc in software but is there anything in the general literature / case studies of 'improving' too much and degrading the core product(s)?
Not to mention that it's always funny to search for an issue on Google, find the links to the forum, see all the people that chime in with a similar issue, the few souls that try to help, then, as you scroll, the further desperate comments of "They don't care about us." Shouts in the wind.
If the website then how would it know your location if you don't allow it?
This is clearly an intentional anti-pattern, and it's been there for over two years. I have to actually type, for example: "Fry's electronics, city, state" (remember, this is on a TOUCH KEYBOARD) to get where I want to go.
It shouldn't really be in debate that the UX of maps has gone way downhill. There's simply no comparison to the older version and I've never met anyone who wasn't disappointed by the changes.