If we don't take skill into account AT ALL then there could be brackets where top players place last.
Think of bracket where in the first round, Nairo is playing Esam and Gnes is playing DEHF. The winners of those two sets play each other and the losers of those two sets play each other. That could result in someone who could possibly win the tournament and would almost definitely place in the money getting last because they had to play 2 other top players right away and happened to go 0-2.
On the other hand, you could have a 4 player grouping of Random Smasher 29, Ganonplayer1345, animefangirl87 and DKrox249. Assuming this grouping is part of the same bracket as my earlier example, you could very likely have Ganonplayer1345 outplacing Gnes at this tournament.
If we decide to seed bracket using pools results, where say, top 4 make it out of an 8 man pool and we seed the bracket by having 1st and 4th from pools playing, and 2nd and 3rd in pools playing while using ONLY location based seeding to make the pools, we could have one pool of Nairo, Esam, Gnes, DEHF, Mr. R, Ally, Zero, 9B. That would a perfectly seeded pool location wise, but only 4 of these players, all of whom are arguably #1 in their region, make it out.
Say another pool is Random Smasher 29, crappyplayer4, Ganonplayer1345, animefangirl87, bestsmashplayerintheuniverse, Player-XYZ, yugiohking1337 and DKrox249. In this hypothetical tournament, players like Mr. R or DEHF would not be participating in the bracket, while players like Random Smasher 29 are.
Now, before you attack me, I'm necessarily against what you are proposing, just pointing out that there are very clear flaws to only using location based seeding and not taking skill into account at all.