Parent and offsping often correlate with respect to their location. It is possible to inherit a high-fitness location; one tree can inherit the sunny side of the hill from another. But the significance of this inherited variation is limited. A population can near-literally 'explore' a physical space, if location is heritable and is linked with fitness. It may move along gradients of environmental quality it may climb hills, or settle around water. But to the extent that reproductive success is being determined by location per se it is not being determined by the intrinsic features that individuals have. If extrinsic features are most of what matters to realized fitness — if intrinsic character is not very important - then other than this physical wandering, not much can happen.
What can happen is that adaptations can develop. Lightning strikes can find the shortest path to the ground, propagating cracks can locate weaknesses in materials and drainage patterns can develop structures that efficiently drain basins. The idea that concepts like 'fitness' and 'adaptation' apply to these kinds of simple inorganic systems is a big deal for physics - and a big deal for Darwinism.
Of course in these kinds of system more than position is inherited. For example, in electrical discharges, charge is also inherited. However position is important - it is copied with high fidelity, it can often vary considerably and many other properties can depend on it.
Godfrey-Smith attempts to draw a distinction between "intrinsic" and "extrinsic" traits - and then claims that this affects the "Darwinian character" of processes. However, traditional Darwinism has no use for such a distinction - all it cares about is whether traits are inherited. If you look at axiomatic expressions of Darwinian evolution, "intrinsic" and "extrinsic" don't get mentioned. That's because they don't matter. They are irrelevant to most evolutionary theory. Heredity of traits is what matters - not whether those traits are "intrinsic" or "extrinsic".
It's true that "intrinsic" traits can be more numerous than "extrinsic" ones. However, that's no reason to single out "extrinsic" traits and exile them from Darwinism. Darwinism makes no distinction between "intrinsic" and "extrinsic" traits. The exact same rules about copying with variation and selection apply equally to both types of trait.
Peter says "the significance of this inherited variation is limited". It seems to me that the significance of this inherited variation is huge. It it wasn't for positional inheritance, we would all have been born in the vacuum of space and died instantly. It may be only "physical wandering" that means that we were born on the surface of a planet - rather than in interstellar space - but it makes the difference between life and death for all of us. Location is actually a very important property that affects fitness. We should study how it evolves using good old-fashioned evolutionary theory - it absolutely does apply.