Well first, I'm in the weather industry, not the location-tracking industry, but I will share some of the insight for how this could be done. The barometer won't help with your latitude or longitude usually, because you are correct: the pressure will be approximately equal in those dimensions when you are looking at such a small area.

The barometer is sensitive to altitude changes much much smaller than a meter, probably something like 0.1 meters. So if you are a person, with a smartphone, and you are in a tall building, the barometer can assist with determining which floor you're on. Other sensors would need to be used for calibration (since the changes weather will affect the floor-level) and it doesn't help with the x,y coordinates, just the z. But other location systems are now very very good at x,y and they mostly lack the z.

So by adding the high-accuracy relative altitude capabilities of the barometer to the existing x,y systems, you can get extremely precise locations.