According to Cnet's Declan McCullagh, Microsoft tweaked the Live.com location services API so that it no longer allows someone to enter in a MAC address and receive a precise geographical location. Furthermore, Cnet got Windows Phone program manager to issue the following statement:
This change adds improved filtering to validate each request so that the service will no longer return an inferred position when a single Media Access Control address is submitted. While it was not possible to use the service to track a roaming mobile phone or laptop using its MAC address prior to this change, Microsoft is keenly aware of the sensitivity around all privacy issues, especially those surrounding geolocation...
Image via Declan McCullagh/Cnet