location-of is a response to post that indicates location information for the post.
Post a location-of response to a post that you want to explicitly suggest that the author of that post add a location to.
Why a location-of post separate from just an edit post of a location property (is that even possible)? Because #Facebook (see below) shows special UI, and notifications for a location-of prompt, response, and acceptance.
TBD, possibly (brainstorming) with a p-location-of property and embedded h-card / h-geo / h-adr. See similar tag-of response.
None so far.
If you accept the location-of notification (possibly another response?), then that shows up in their notifications as a "so-and-so accepted your location suggestion on her photo." (white location pin on pink background mini square icon) n minutes ago / about an hour ago etc.
Then the post itself shows the location as it would if the author had originally specified it themselves.
There is no indication that the location information came from a "location-of" post from someone else.
This is in contrast to the way "tag-of" posts (specifically, person-tagging) are displayed by Facebook, where it does show who tagged whom in a photo.