@KernelPanicake is quite correct in finding where to set location in microG. [1]
This link is from June, just after the change Testing the positon.xyz network location server - confusing · Issue #2422 · microg/GmsCore · GitHub.
We see much the same point as yours @mitu and a reply from Marvin Testing the positon.xyz network location server - confusing · Issue #2422 · microg/GmsCore · GitHub but the whole thread is worth reading imho.
FWIW I am currently using beacon rather than position.xyz, both seem stable, beacon happens to be less variable near my home.