How is this protecting users? They are outright lying here, if I understand correctly. Also why are they asking for my location?
Its protecting users from getting visits from Kazakhstan's security services for covertly communicated with foreign entities. That is, presuming that the content of their traffic isn't unwelcome by the security services, since otherwise, even with the use of the MitM certificate, they'll still get visits.
If you are connecting via a mobile phone the address is likely to be registered as at one of the phone company's locations which could potentially be in a different state. For many home/office serving ISPs this is similar. Also, if you are using a VPN of some sort the address you present to the web server is quite disconnected from your physical location.
If on the other hand they request your location via your web access client and you agree, it will be using localisation APIs that may well know your location with some precision: using GPS if your device has it and has it turned on, or via wireless AP availability based lookups otherwise.
However, there is a different kind of GeoIP that has the potential to be much more specific as to the location, based on a join between Internet traffic and transactions that target a specific location. e.g. when you purchase a physical item from an online vendor, with your house as the delivery address, they now have both your IP and location. Obviously for this to work it depends on a) the IP address remaining the same for some period of time and b) sharing of the necessary information to allow the join. afaik both are often true.
The city it resolves to is where my isp has their HQ.
Seems Comcast maps IP (which they issue) to postal address to exact Geo coordinate.
I am sure the NSA does better but Kazakhstan? I have been inside one of their embassies to be shocked that they were watching the news on a black and white CRT TV!!!
But obviously the security as a whole has to consider the increased risk due to the centralized cert, disregarding entirely the fact that you're trusting a totalitarian government with all of your secrets...