I'm also having the issue where the my location keeps "jumping" between two points in all map/locations finding apps (Apple Maps, Google Maps, Inrix, Runtastic, etc.).
What I can add is that the locations that the phone is bouncing between are the wifi location and the gps location. In other words, If I turn wifi off, the location stays on the inaccurate of the two which is 3 blocks away, but when I turn on wifi, it bounces between the inaccurate and the correct location every couple of seconds. Whether it's a software or hardware problem, I have no idea since some people are still having issues with their replacement iPhones.
I experienced this issue on iOS 10.0.3 and I'm still having it after updating to iOS 10.1 yesterday. GPS was fine until some time pre-iOS 10.0.3. It worked fine until then.
I have a 128GB matte black iPhone 7 which I preordered on the Apple website the minute it went on sale.