I am working on the same site as Gunnar.
From a user viewpoint, the benefit would be that the user could quickly get an idea of location (and therefore timezone, language, and currency) with a single click on the user symbol. Our site pretty much spans the world, so this would save users asking.
Some of the other sites I use have user selectable flags, but on many of them the user can select any flag they wish. This may allow them to express some personal allegiance, but it kind of defeats the main benefit to be had from having this kind of information.
I would say detecting it from ip addy would be a bit too much overhead if you have to do a lookup at every user login (Which is pretty much what you would have to do to handle the case of a user who is travelling), so linking it to the user’s country as defined in their profile would be my choice.
Forgive my imprecise use of Discourse terminology, until a week ago I had never used Discourse. I’m not really quite as obtuse as I initially appear to be. (In fact, it’s a lot worse once you get to know me.)