For iPad and iPhone, GNSS functionality (such as GPS) is an integral element of the Cellular chipset used by Apple - as this brings many functional benefits (such as Assisted GPS - aGPS) that are not available for standalone GNSS chipsets.
As such, both iPhone and Cellular models of iPad benefit from GNSS to provide precision location services, whereas WiFi Only models of iPad lack the Cellular chipset upon which the iPad relies for GNSS location services.
While GNSS functionality of ipad and iPhone are integral to the Cellular chipset, this functionality is independent of Cellular functions - and is not reliant upon having an active Cellular plan or Cellular connection. For both iPad and iPhone, Cellular connectivity obviously does require an active Cellular plan with a Cellular Operator - and this is clearly a service that has a recurrent cost (either pre-pay or subscription).
As such, WiFi Only models of iPad have no GPS capabilities with which iPad Location Services can derive location. This fundamental difference may significantly impact your ability to use mapping or other Apps that require precise location data - in particular if real-time positioning (e.g., a moving map) is required. When using a mobile phone’s hotspot, the phone does not share GPS information derived from its own positioning capabilities.
WiFi Only iPad models can only “infer” their location from a database lookup of neighbouring WiFi networks for which the geographic location is known, or the geographic location of your public IP address. For static applications in urban locations, where the location of IP public IP addresses and WiFi networks are known, an “inferred” location can be relatively accurate. However, in rural locations, or when using a Cellular/Satellite/VPN connection, location accuracy of an inferred location [if it works at all] may be very inaccurate.
Choosing a cellular model does not commit you to adding a cellular service plan for the iPad, but ensures that you have immediate access to GPS/GNSS and precision positioning services.
Many iPad owners deliberately choose a WiFi+Cellular model in preference to WiFi Only - while having no intention of using a Cellular network connection - explicitly for access to precision location services that are otherwise unavailable to WiFi Only models of iPad.