It gives the network location of the router/modem that connects you to your ISP’s network. Your ISP knows your physical address, in case they have to send a repair technician.
The association of an IP with an ISP is public information, everybody knows that. With other public information, it’s likely everybody knows what town you live it. Your exact location is likely not shared by your ISP with everyone, but of course law enforcement with a valid subpoena are likely to be given the exact address of your modem.
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