Location is populated from CMDB Solution by manually creating them in the SMP and not from Active Directory (I know..odd huh)
Under "Manage>Assets" go to "Manage Configuration Items>Organizational Types"
there you will find the locations.
Follow This KB article for details.
Note: there is a statement in it about no Location field in Active Directory but that is not enirely accurate as you may have found yourself. There is an "Office" attribute from what I remember and that surely would go a long way in the Incidents.
poor work from Symantec on this one in my opinion.