A location radius can seem large compared to the actual calculation accuracy, the main reasons can be:
Base station density
Even with a high number of base stations receiving the message, the estimated position can be in an area where the base station density is low, for example when the highest RSSI is received by a base station in a low-density area.
Radius network contribution is not up to date
It can happen when some base stations have recently been installed and are not contributing to the network location calculation.
Highest RSSI base station is not used
It can happen when a message is received by several base stations, one of them having a high RSSI (ex: -70 dBm). In such case, one can expect the radius to be very low. This is true except for when this specific base station is not used for the location computation.