The filter by location will work in the new listings. To enable them in the existing listings, make some changes in location and save them.
In this section, you can enable showing the search results by filtering the particular location. To enable this option, turn on the Show Location/Include Location in Filter option. The option sorts the listings by selected location.
The Filter by location option is not available on the Aircrafts, Rent a car, Rental Two,and Equipment layouts.
On the Unit Measurement field indicate the unit measurement for distance and enter the search radius on the Set Max Search Radius section.
For the Filter by location option, the Google Map API Key should be entered on the Theme Options > General > Google API Key field. Read this doc from Google to learn more about finding Google Map API Key.
You can enable showing the recommendations of other listings if there are no results available in this search intent. To do this, enable Recommend items in other locations in case of empty result option.
This is how it will look on the user's page:
Search by Distance
You can allow your users to filter based on the radius of the location. To do this, turn on the Distance search.