Actually, that's not exactly correct. Your application will be reviewed by the person selecting for the district you put in your first choice. If you have down a particular location(s) that is(are) full (or otherwise not hiring you), they may consider you for other locations within that district... so, say you put down that you'd really like to work at SFO and they're not taking on developmentals at the moment, they may see if you would fit into Oakland or Sacramento or wherever. Or they may just pass you straight to your second choice state.
What they won't do, however, is pass you around from person to person, trying to find a place to fit you in. For starters, it'd take forever -- each area already has plenty of people to deal with, and the panels would go on forever if areas passed their "rejects" onto others. But more importantly, it would miss the point of the geo preferences, which is intended to place hires in a location where they'll be likely to stay for a while. If a candidate puts down that they want to work in Florida and Georgia but are offered, say, Nevada, they're less likely to accept it, and if they do, more likely to get out of there as soon as they can. Which means money and time wasted for the FAA.
"What about people who have been offered locations outside of what they put down?" Well, it's almost always one of two things: 1. The location they were offered was within one of their districts, as mentioned above, or 2. The change came AFTER they were already offered an interview (or received their TOL). An interview invite is basically a hire, since at that point, it's yours to screw up. But if, during the process, the FAA realizes "oh, crap, we had too many people turn down this facility -- or we just didn't offer enough slots for it", then they can transfer those new hires over to it. Doesn't happen a lot, but it's not unheard of. A few people from PUBNAT2 had their TOLs changed, a few more from PUBNAT3/4 and PUBAK were asked if they would reconsider their location in Alaska. But in all of the cases I'm aware of, it was done AFTER receiving an invite to a PEPC.
"Okay, but what about the famous Louisiana email?" That was a one-time thing that is very, very unlikely to happen again. Why? I just got through writing a long explanation of it on SM, but the short version is because they've corrected the problem which led to needing that email, which was sent out to a few people in PUBNAT2. Basically, at the panels for PUBNAT2, not enough people were picked up to address a severe shortage in Louisiana. When they realized it, they sent out the email to try and get enough people to last until the next hiring round. But since then -- and this is coming from two people who work in the hiring process and explained it to me -- they've corrected things so it won't be overlooked in the past. And if they get in a situation where not enough people are selected, they'll now handle it as mentioned above: asking applicants to consider a different area, or outright changing their TOLs (which they did this most recent round with FAI). There are also temporary staff reassignment offers made to controllers at nearby facilities.
"Uh, great. But how do you know all this?" Answering that would make this already long post even longer, and I don't want to divulge my sources online -- because I don't want people to track down the FAA employees I spoke with flooding them with calls. So I guess you'll just have to take my word for it. But trust me, I've spent about every free moment I've had over the last several months figuring this stuff out.
Anyway, the moral of the story is think carefully about where you want to go and what you'll accept -- and put it down. And don't hold out too much hope for getting offered other places. It may happen, but if your goal is to just get the job, figure out where your odds are highest and go for it. Besides... West Virginia isn't all bad. The skiing's great.