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The issue with this scheme of things is that there's no guarantee that location is correct. It's just finding your IP address, looking it up in a database and finding its assigned location. There's no Bond-type technology involved, no world map zooming in on your continent, country and city. When a website tries to figure out where you are, it's generally not doing anything particularly clever or advanced.
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Sites like Netflix supplement basic geolocation technology by also trying to detect IP addresses used by VPNs, and blocking anyone using them. Connect to a US location, the VPN should allocate you a US IP address, and websites will see you as visiting from New York, or Miami, or whatever city you choose. Using a VPN makes it easy to bypass this protection.
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There are several big-name providers who offer this service for businesses, including MaxMind and IP2Location. Geolocation can be as basic as detecting your IP address and looking up its location in a database. When you visit, they use a geolocation system to identify where in the world you are, and then customize their content to match your location. Websites, particularly streaming platforms like Netflix, will often restrict some content to users in specific countries. To understand what your VPN provider might be doing, and why it matters, we should first go back to basics, and one major reason for using a VPN in the first place: to make it appear as though you're in another country.