Jaan, for me it's 50/50. I find it generally correct when I view all the searches for specific locations, but the "general" ( All searches: All locations) selection for "Top search queries" sometimes I find is not so accurate.
I really have to dig deep to find the keywords under specific locations to see where my site was picked up.
it's weird how you are ranked for keywords your site is definately not optimized for.
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