Settings/Location and Security then unchecking BOTH the 'Use wireless networks' and the 'Use GPS satellites" worked for me. GPS Locator icon gone - and comes back again when you reactivate these services.
The phone uses WiFi to locate, as well as GPS...
Hope that works for you.
you are absolutely correct, this double location method was implemented to assist in pinpointing your location while in built up areas, like downtown for eg.
it is perfectly correct to turn these off if you don't want to be located in camera mode.
it's funny how we all moan when things are not the way we want. investigate, research and solve the problem, or choose to be left behind with older firmwares and let others have all the discoveries, fun and work out problems for you.
have an objective and remember it, this will guide your processes..