As Ath said, GPS has nothing to do with the SIMs or the cell radios.
What happens with a dual SIM that supports stand-by is that when you're not actively using the cell radio (is., you're not in a phone call), the phone is 'multiplexing' between the two SIMs. It'll activate one SIM to allow a connection on that phone number, and if nothing's going on, it'll switch the connection to the other SIM. It does this automatically, without you having to manually choose which SIM is active.
I don't know how often the switch is done, but it's fast/often enough that any incoming calls on either SIM just ring the phone. Dual active SIM phones actually have two sets of cell radios, so using one SIM doesn't affect the connectivity of the other at all.
However, when you are actively in a phone call with a stand-by dual SIM, the other SIM is never activated. I think that for most people this isn't really an issue - incoming calls on the other SIM will go to voicemail. Just like if you had a single SIM.
It might be a problem if you want to conference calls across the SIMs.
The other area that I think where stand-by could be a problem is if you're like me and use one SIM for voice/text and the other for data. In that situation you won't be able to use data while you are actively in a phone call. Personally, this hasn't been a problem at all. The only time I noticed that I didn't have data access during a phone call was when I tried doing it just to see if it worked or not.