Normally Dropbox app does not use your device's location data. But, if you turn ON 'Background uploading' feature, then you will need your device's location data. The reason behind this is, your photos may contain information about where they were taken, so, Dropbox needs special permission to access them. Dropbox app will simply ask for permission to access your photos, because Apple's privacy settings for photos are separate from location services. If you click "Ok" and give the permission then only app will be able to upload photos to your Dropbox account.