I've setup a group of users which permissions that includes:
content manage_locations Class( User )

So users of this group can add a new location to another user but not to a user group.

The issue is that the "Add locations" button is enabled all the time even for user groups although the action is not done (click on the button, select the new location, click on 'select', the new location is not added).

The button in that case should be greyed out.