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Zava Design
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I found a bunch of online sources that would seem to support the idea that “less is more”, where it addresses both what users are searching for and provides a better user experience (see links below, plenty more out there).

Consider: Someone searching for “Bondi Beach mechanic service” (not my current client but a good similar example).

Your top level location page is never going to rank top for “Bondi Beach”, and that isn’t a search query you would care about. It’s that actual search phrase you want to target, “Bondi Beach mechanic service” (and relevant ones), and hence it makes logical sense (to my sometimes-slow mind ;) ) that a page that contains both “Bondi Beach” + “mechanic service” would rank higher than two separate pages, even if they link to each other.

In addition, they will have a stand-alone page within the website titled “mechanic service” that all location pages will also link to (in the footer), which will have content unique to the “mechanic service” content on each of the location pages. In the absence of compelling evidence otherwise, I’m struggling to see if adding separate “mechanic services” sub-pages to every “location” page is going to do anything other than make the site a real pain to maintain and update, and confuse a user with so many seemingly duplicated pages on the same topic/service.

But am always open to be convinced otherwise (and hence this thread ;) ).