I am sorry I did not understand you were using the AppBuilder Companion App for iOS from your first post. I can confirm that the Geolocation plugin currently does not work on iOS 8.1 if you are using the Companion App. I have logged this as a bug in the AppBuilder Companion App for iOS.
I have tested the Geolocation plugin on a real app outside of the Companion App and it works on iOS 8 and 8.1. If you are planning to deploy this app to the app store, then you should have an iOS developer account. You can generate a developer certificate and provisioning profile for your app. You can then sign and build your app with it as an app package and test it on a device. Let me know if the Geolocation works that way.
Looking forward to your reply.