Photo syncing lets you save the photos in your camera roll to Facebook. Photos in your camera roll may already contain data about where they were taken, and iOS only lets Facebook access your camera roll if you give it permission to use your location.
Turning on location services also enables other location-related functionality, so you can do things like say where you are when you post.
If you don't turn on location services, you can still use Facebook, but you won't be able to sync your photos.
To learn more about how location works with your iPhone, including how to reset or change your location settings, please see Apple's Location Services support article.
For more information on how Facebook uses photos and location information, please see our Data Use Policy.