The location entry currently uses a composition of a regular GtkEntry, GtkToggleButton, and a GtkMenu most likely due to GTK not offering anything useful back then. However, it has been long since GtkComboBoxEntry was introduced and it is the proper widget to be used here. It also has the option of a unified look which Thunar’s current solution can not achieve.
The toggle button did nothing useful and has been removed, so an entry + gtkcompletion is the way to go here.