Applets using the Location service require constant access to your device's location so they can run when you enter/exit your specified area.
However, there are other triggers and actions on IFTTT that also require 'Allow all the time' location permissions, like Android Device - Connects to any WiFi network.
While these sorts of triggers and actions may not appear to use location services, starting from Android 10, most apps that perform functions related to WiFi and Bluetooth require constant location access.
For further clarification and technical details, please consult the official Android developer documentation.