A company here recently photographed our huge annual Fireworks display.
They were given permission to fly at night, and to 1500 feet, by CASA, both of which are normally forbidden by the rules.
However, That was ample to get them up above the fireworks, and 500m is higher again than what they were given authority to go to, so really should be more than enough.
So I'm really not too sure why everyone keeps baulking at the restriction.
I do partly understand it, from the perspective that I also find restrictions frustrating as well, and it's part of why I won't be buying the P3 but will instead buy either an I1 or wait till an
I2 comes out, as they're both professional level craft that at the moment don't have restrictions that I know of, but even with my own distaste for having restrictions imposed on me by others, the fact is that there really shouldn't be much need to go higher than that. Especially with how slow the stupid descent speed on these things is, it's going to take more than 4 or 5 minutes to come back down. About 1/3rd of the total flight time you get out of a battery just to come back down doesn't appeal to me at all. So whilst it's frustrating to be forced to that limit, in reality there's not much need to go higher than it. In Australia you'd have to have special dispensation from CASA to go anywhere near it anyway.
As for the question about GPS, from what I've read, the distance limit is able to be changed by the user, and still allows GPS, it's only the height that can't go beyond the 500m and that's in both GPS and in ATTI.