Accessing GPS every 20 secs just can't be what they had in mind when they implemented it. (not even in case it fails, because it would prevent the CPU from going into deep sleep, which saves battery)
What I believe is happening:
The developers of Swype didn't test for that error, because Google Play filters the app for all devices that don't have GPS, so the device is expected to have the hardware and to return some specific error in case it doesn't work (GPS turned off and so on)
And the CyanogenMod privacy feature interferes in a way, that causes an unexpected error that they didn't account for.
Combine that with the lack of an exponential backoff and you'll get this result.
This is a problem with a lot of the enhancements that custom ROMs provide on Android. They break the API contract a developer has with the SDK and unexpected things happen. It's the reason all these ROMs aren't allowed to ship with Google Apps installed -- they fail the compatibility test. Most developer don't bother to investigate these issues and work around it because they're rarely documented and hard to discover.
Accessing GPS every 20 secs just can't be what they had in mind when they implemented it. (not even in case it fails, because it would prevent the CPU from going into deep sleep, which saves battery)
What I believe is happening:
The developers of Swype didn't test for that error, because Google Play filters the app for all devices that don't have GPS, so the device is expected to have the hardware and to return some specific error in case it doesn't work (GPS turned off and so on)
And the CyanogenMod privacy feature interferes in a way, that causes an unexpected error that they didn't account for.
Combine that with the lack of an exponential backoff and you'll get this result.