This is very disappointing and short-sighted. There is a valid and common use of the external gps source dev option in Android - namely, using an external gps receiver.
In Uganda, as in Malawi before my new posting in Kampala, I use an external gps dongle that has better reception so that my position doesn't fluctuate by 100m+ constantly because gps was never designed for equatorial optimization, and unlike in most of the developed world there aren't 2 dozen routers nearby at any moment to boost Google location services. It is a bluetooth device that is carried on me when I play. It isn't spoofing my location, it's there to provide my phone, and the game, a MORE accurate location.
I'm 200% onboard with anti-spoofing efforts, as it's the bane of all gps-based gaming, which I love. But there's a reason other games use FAR more sophisticated detection methods than simply looking at a single android flag.