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Assuming nothing else is using location services, if LR is disabled in OF, the only time you should see the indicator is when looking at the map. There have been bugs in the past that we were still monitoring your location after leaving the map. In those cases, actually quitting the app instead of just backgrounding it would get it to stop monitoring.

If LR is on and you have a location set on a context, the indicator will always appear. If LR is on and you don't have any locations set, it should not appear except when looking at the map.

Have you noticed if it is draining your battery when the indicator is on when it shouldn't be? The monitoring for LR should have no noticable impact on battery life. But if it's actively using the GPS due to not giving it up after leaving the map view, then that would drain the battery. But I have no idea why activing OF would use the GPS unless you were looking at the map.

Something to try would be after you have to toggle LR on and off to remove the indicator, does turning LR back on make the indicator reappear?