GPS has an altitude component so maybe it thinks either the AirTag or the tracking phone is really high up?
Nah, the altitude component is less than a rounding error at the scales involved.
It's clearly in a vaguely geostationary orbit above Guatemala City.
The story arc is about a lost airtag that is living it's secret life in Mexico.
The link is for a post where Apple decides the distance to it's location in Mexico is greater than the circumference of the Earth.