Well it doesn’t!
I spent a long time trying to workout where the ‘use geotag data in jpeg’s EXIF‘ command was when adding images to the map. It doesn’t exist. No where to be found.
It appears though, there is a setting hidden in flicker that tells flickr to use the geotag data in photos as you upload them. In flickr go to Your Account, click on the Privacy & Permissions tab, and you can find the Import EXIF location data setting.
But it only works for new or reloaded images, not existing ones.
Bit of a oversight don’t you think?
You would think that, if your jpg has EXIF geotag data, when you went to add it to a map flickr would think “hmm, this this photo has geotag data. I’ll ask the user ‘Would you like to use the geotag data to place your image on the map?’“. But no, it doesn’t work that way.
So you are stuck in an all or nothing situation. Either all your images with geotags are marked on maps, or you have to add them all manually. Come on flickr/Yahoo, it shouldn’t be that hard to implement it for individual images.
(I’d like to say thanks to Jannis Hermann for having a post about geotags in flickr. Everything else I found was about how to use flickr to geotag photos.)