Well, I figured out what was causing the forced association, but I have no idea why!
When I re-ran foreman-installer and enabled --foreman-proxy-puppet=true I could freely assign and remove Locations from the smart proxy
If puppet was disabled (I don’t use Puppet in my environment and it takes a lot of RAM on the proxy), the smart-proxy forced itself into all Locations. I can even disable the puppetserver service on the proxy and it will still allow free association of Locations.
I’m not sure if this is a bug, or intended, but I cannot fathom why it would be intended.