Battery replacement need location services turned off?

They do require that you turn off "Find my iPhone" before they will work on it. According to the person at the local Apple Store, this is to ensure that you actually know the Apple ID and password, and therefore presumably are the actual owner of the phone. When they have finished the battery replacement, and return the phone to you, they remind you to turn on the feature again before you leave the store.

No,where did you read it?

I have not heard that story but it doesn't matter. Turn off location services, replace the battery, turn location services back on. You certainly don't need to determine location while the Apple tech is disassembling your iPhone.