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@chez_jay
If the GPS loses your position, it probably extrapolates where you are from last known position along your last known heading, assuming constant speed.
If it knows actual speed, it could extrapolate using actual speed data and make a much better guess at where you are along your last known heading.
Or if your GPS gets the wrong idea about where you are for a short period, from say reflection off buildings, and thinks you have instantaneously jumped 10m, if it knows what your actual speed is, it can rule that out as spurious.
I have no idea if it's actually implemented like that though.