To be fair Android could be way clearer about this. Instead of "App wants to access your location [allow] [deny]" which is clearly confusing even for highly technical HN readers, why doesn't it say "App wants to access WiFi. This may reveal your location. [allow] [deny]" or something like that?

I had no idea that it worked like this either; if an app asks for "GPS permission" then I assume it wants to know my actual physical location. For something like Tinder or sharing your location on WhatsApp this of course makes sense. For something like a printer app much less so, and I'd be suspicious as well. I don't think that's especially paranoid.

There's a difference between being paranoid and not willing to risk it. You don't actually know which it was asking for, being that the access controls aren't fine grained enough is the problem here.