Prior to today's update, Android users had to accept an all-or-nothing approach to sharing their location. If users granted the app the ability to access their location, the app could collect that data no matter what -- even when the app wasn't running in the foreground. The change adds some subtlety to that feature, allowing users to opt out of sharing their location information when the app is closed. Apple already allows users to prevent apps from accessing their location when the app isn't open, so Facebook did not add the feature to its iOS app.
If you use Facebook for Android and had your location history setting turned on, tracking will remain on by default -- though you should receive a notification alerting you of the new privacy option. You can also manually change the setting at any time by opening the app, going to the "Settings and Privacy" menu, and viewing the "Location Settings."
While Facebook might be cutting back on its tracking practices from its flagship app, the company is also experimenting with location tracking via Instagram and recently patented technology that can predict where a user is going.