Because unsavory people try to use this helpful feature to illegally track ships and locate facilities that they should have no ability to find. I know, it's deplorable, but it's a fact of life when playing with so many exploitative wannabe cheaters.
The tool you are describing is to map out items that you own that are docked in entities you own. If I have your item in my ship, you have no idea where said item is, so its location should ovbiously not show.
Pretty sure it was fixed a couple syncs ago. Just tested now and didn't see location on an item I own that is docked in something I don't own. ( i mean, I know where it is through other means, but it doesn't show me on the Galactic Map).