The camera is capturing the latitude, longitude, and altitude, unless you are inside a large building, a museum or similar, where the GPS cannot receive the GPS satellites. The GPS coordinates will be embedded in the EXF tags of the photo.
The problem is, that the Photos is not showing the numbers, only a location name. Photos is looking up the closest known location for the GPS coordinates and showing the location name. To see the GPS coordinates for your photos use a third party app, that can show you the GPS values. I am using ViewEXIF to see the numerical location values.
After installing ViewExif, I just have to select a photo in Photos, then go to the Share menu, and tap ViewExif. Now I can see the longitude, latitude, and even the altitude:
