I created a category with Auto Assignment by Location. If I create a ticket with this category the Auto Assignment works fine. If I create a ticket with the same category but with a CI attached I get the following error message and Auto Assignment failed:

Error doing auto_find_assignee AHD05450:cr:402759 Request Area or Category has locations, but Asset has no Location.

CA Service Desk Manager 14.1
CA Service Desk Manager 17.1

Auto Assignment based on Location first checks the Location for the CI and in case the CI has no Location then Auto Assignment will fail. You can get around it by assigning a location for the CI or linking the CI only after assignment has been performed.