There are several layers of caching in play, but the eventual source of truth goes back to the Account object. If your Location is still returning
contactBookEnabled then try updating the Location via Edit -> Update like I described for the Account and that should rehydrate that object and start returning
contactBookEnabled (assuming your Account has also already been updated).
In terms of the input parameter in existing SmartApps, by default it’s likely that most of them are just going to stop sending notifications if they have not been updated and they are written according to the guidelines. When you go back in to update them though, they should display the push notification/SMS options instead of Contact Book options once your Location and Account caches have pulled that new value.