That must be it. I was on an Air Canada flight that had free promo wifi from YVR to YEG. During the flight the location history has me travelling to Montreal, then to San Diego before arriving in YEG (actual destination). Don't know about Montreal but I updated my Fbook status during the flight and the location came up as San Diego.

On a different international multi segment flight, there is no location info at all during 2 segments where the airports did not have wifi. Changing the setting to show 2 days adds in my departure city but skips over the second city where I didn't get off the plane and kept my phone in airplane mode.