There are quite a few apps that interface with FB. In addition to flat out showing the wrong location for an IP, I suspect FB gets confused and maybe shows your location as the most frequently logged in location rather than most recent or currently active login. I have a calendar app that syncs my FB events to my google calendar on the hour. Logging out of FB, clearing my web cache, and logging back in doesn't fix the location issue.
After "ending all activity" on the FB Security and Login settings, which forced my calendar app and all the others (like Bumble) to disconnect, then logging back in, my location corrected. It also corrected to my actual location, rather than just my ISP's central location.
This is hardly a fix or an answer to the problem, but it's a way to get your location corrected if you're willing to give up the utility of FB interfacing apps.