And by "location encounter" do they really mean an encounter anywhere?
Not exactly. You misquoted the text. It says
After resolving a location encounter or an Expedition Encounter on that space, flip this card. (emphasis mine)
'that space' refers to the space indicated on the Clue you placed on the card 'faceup'. I.e. the Clue only serves to tell you which random space the treasure map refers to. You then have to go there, have a location or expedition encounter and you get to flip the card.
The flip side offers a modest reward (there are at least 3 variants).