I.E. Are US ISPs, particularly big ones like Comcast, required to geolocate ISPs to the state where the person is actually in? What about mobile ones?
Where I live (not US), it is extremely common to get an IP that Maxmind geolocates to a region far from where you actually live.
The law in question requires "commercially reasonable efforts"
Calling geoip databases "surveillance capitalism" seems like a stretch. It might be used by "surveillance capitalism", but you don't really have to surveil people to build a geoip database, only scrape RIR allocation records (all public, btw) and BGP routes, do ping tests, and parse geofeeds provided by providers. None of that is "surveillance capitalism" in any meaningful sense.
How is it not? Most "normal" surveillance works the same way - you look up public records for the person you're going after, cross-reference them against each other somehow, and eventually find enough dirt on them or give up. This is surveillance, and it's being done by and in the interests of capitalism.