So I just gave the new iOS SDK 17.0.4 a quick whirl using only the 'Hello World' example, and it looks like it still requires the 'Location updates' Background Mode to be enabled (which it is by default), otherwise it will crash at launch. So still not possible to turn that off if you don't need it in your app. There was a discussion about this here: iOS SDK 17 Location Updates
Main thing this effects is for anybody trying to get an SDK app submitted to the App Store (I believe both the public one and the Volume Purchase Programme one have the same verification and review procedure before being accepted). To submit your app you will still need to enable Location updates and demonstrate a meaningful use for it in your app. Otherwise, SDK 16 is still available and doesn't require Location updates to be turned on.
Note: Of course, it is still not recommended to submit iOS SDK apps to the public App Store anyway.