If I remember correctly Magic Earth claims to get its traffic information from public sources, without using user’s locations like google. So no, location data is not strictly necessary for that.
It seems you are right: https://www.magicearth.com/faq/#traffic-and-events-help
Where do you get the traffic and road closure info from?
We get it from a third-party provider; it is not created by us.
It’s limited to mostly first world countries: https://www.magicearth.com/feature-availablity/#hd_traffic
But somehow, someone tracking it’s users, I can’t imagine other way to get data like this. Maybe some carsharing service, company fleet management or something like that.