The "Locate nearby" option works separately from the "Current Location" and "Search Radius" options. "Locate nearby" helps to identify the nearest locations to the current position of the access point.
It is required to allow the browser to check your location in order to get the corresponding results.
When you navigate to the Store Locator page you will see a pop-up which asks you to allow checking your current location. You need to click "allow":
Without this option enabled, you will not get the valid result.