The feature is being distributed through Google Play Services for every Android phone running version 5.0 and up. Unlike major system updates, which take years to reach the majority of Android phones, Google Play Services is centrally distributed by Google and can hit every single active Android phone (excluding non-Google devices in China) in a matter of weeks. The Android 5.0 and up requirement means 94 percent of the 2.5 billion Google Play Android devices will have access to the feature.
The feature is activated (and deactivated) through the Google Location Services switch in the Android settings (also called "Google Location Accuracy"), which says, “Google may collect location data periodically and use this data in an anonymous way to improve location accuracy and location-based services.” Every Android phone asks about this during setup, so while it's not accurate to call this "on by default," you are heavily encouraged to turn it on Location Services during the setup flow, and I'd guess it's enabled on the majority of phones.
Earthquake detection uses your coarse, city-level location data, not your fine-grained exact location data.
Before proactive alerts roll out across the world, it sounds like Google wants to collect some data first. Proactive earthquake alerts will only be in California for now (which already has ShakeAlert and an established data set), and Google says that "over the coming year, you can expect to see the earthquake alerts coming to more states and countries using Android’s phone-based earthquake detection."
