You can't turn off IP-based geolocation. To play the devil's advocate, they might just be using this to revoke stolen sessions when the same session makes requests from different locations.
Not "mistakenly". Their objective is for you to "engage" with the app and submit to whatever shit they throw at you no questions asked.
By using countermeasures, you're demonstrating that you are more privacy-conscious and/or more tech-savvy than the average. This means you are more likely to be a problem when they try to swindle you in one way or another down the line, whether it's the next dark pattern that they want you to fall for or try to scam you and hope you just accept your fate instead of raising a chargeback, etc.
There's no reason for them to accept even a sliver of risk as long as there's an endless supply of people who don't carry said risk, therefore any indicator that you deviate from the average could lead to a ban, especially if the margins are super-thin or non-existent (when the objective is "engagement" rather than profit).
Now I doubt any of this has been started intentionally - most likely the anti-abuse mechanisms learned over time the correlation between different signals such as usage of a VPN, etc, but because of the above there's also no pressure to "fix" this problem for legitimate users of VPNs.
