We are using 2 types of GPS location positioning method:
a. GPS (By detecting the satellite and triangulate the location)
b. WiFi Indoor positioning (Powered by Google)
Since it detects the Satellite signal and using triangulate to detect the distance. The building internally has no signal so when you are indoor, can't detect the GPS and will get the location outside the building.
As Google know each SSID (Service Set IDentifier / WiFi network name) location and IP address, we do not need the WiFi router password as we don't connect to the router but we are using the Router WiFi Signal to triangulate the indoor location. WiFi need to be turned on in watch for the WiFi section.
Quite accurate for indoor position but sometime detected some WiFi mobile router or mobile phone hotspot that will create errors in location. That might suddenly off few KM away or detected tourist mobile WiFi which it will drift to a location between countries.