That’s definitely not normal - I’ve got the same VAW version on Win11 and it doesn’t need (and didn’t ask for) location access at all. The “Create Recovery Media” wizard might have triggered some kind of network search in Windows at the stage where you select the target folder for the ISO file. This search might have triggered the request for location access, maybe?

Veeam Agent for Windows doesn’t actually access your real geographic location. If Windows 11 prompted for “precise location” during recovery media creation, it’s likely a false positive triggered by system-level actions like hardware or network checks. Veeam doesn’t use GPS or send location data. You can safely allow the permission to proceed, then disable it afterward, it won’t affect Veeam’s functionality.

It does not access your location nor should prompt that.   I use the VAW and have never had it do that through the versions.   So there is nothing to worry about here.