Hi TimeIndicator
Below is some documentation about IP obfuscation.
IP Address Obfuscation
Regarding geo location in general, this is from the documentation (https://marketing.adobe.com/resources/help/en_US/aam/data_privacy.html): "Customers can use the Geographic Segmentation feature that allows the customer to map out visitor location by geographic area in either case, but with some slight loss of precision when IP obfuscation is being used".
Besides the traits that contain geo location and "h_ip" signals (maybe "h_x-forwarded-for" as well), we don't think so other traits would be impacted by turning off IP obfuscation.
Regards,
Shweta