Yep, posts will only show if they mark the location you are in. Those location-exclusive posts will not show in any other feed.
This is the new NIP-22. So, there is literally no posts anywhere yet.
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A suggestion. You could ask a diversity of nostriches around the glob to send some events with this tag in order to test and have something to show up.
Hm. In my app it shows one post (that is absolutely nearby) but its from Sept 2022.