As of now, connected locations are used when the guest is uploaded via eClub to the Punchh Platform. However, this is considered as the Favorite location for eclub users when segments are created.
So when an eclub guest signs up as loyalty, the guest is tagged in the 'eclub or loyalty' group and since the guests still have the previous connected location and also a Favorite location (updated when signed up) linked to his profile, he will be included in both the favorite locations group.
If further assistance is required, submit a ticket to Punchh Support. (For help submitting a ticket, click here)