If anyone is interested, I learned that there are debugging capabilities in the Wolfram language, but that led me into a rabbit hole I'm not sure how to escape from.

I thought a simple

Trace[GeoDistance[c1, c2]]

could show me where exactly the problem is, but it generated a trace larger than 10 MB where I can see internal GeoNearest lookups, caching, a lot of https request to dozens of wolfram backends, encoding of url characters, compresssing, client and server session information, URLs to JSP backends, etc...

I think I'll let it go for now... ;)

Position is defined:

store = EntityStore["USCounty" -> <|
     "Entities" -> countyEntities,
     "Properties" -> <|
       "ParentEntity" -> <|
         "Label" -> "Parent entity"
         |>,
       "FIPSCode" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["FIPSCode"] &),
         "Label" -> "County FIPS code"
         |>,
       "Polygon" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["Polygon"] &),
         "Label" -> "Polygon"
         |>,
       "Position" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["Position"] &),
         "Label" -> "Position"
         |>,
       "Latitude" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["Latitude"] &),
         "Label" -> "Latitude"
         |>,
       "Longitude" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["Longitude"] &),
         "Label" -> "Longitude"
         |>,
       "HasPolygon" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["HasPolygon"] &),
         "Label" -> "Has polygon?"
         |>,
       "Name" -> <|
         "DefaultFunction" -> (#["ParentEntity"]["Name"] &),
         "Label" -> "Name"
         |>
       |>,
     "EntityClasses" -> <|
       "Alaska" -> <|
         "Entities" -> ("ParentEntity" -> (MatchQ[#, 
               Entity[_, {_, "Alaska", _}]] &)),
         "Label" -> Style["Alaska", Bold]
         |>,
       "Hawaii" -> <|
         "Entities" -> ("ParentEntity" -> (MatchQ[#, Entity[_, {_, "Hawaii", _}]] &)),
         "Label" -> Style["Hawaii", Bold]
         |>,
       "Mainland" -> <|
         "Entities" -> ("ParentEntity" -> (MatchQ[#, Entity[_, {_, Except["Alaska" | "Hawaii"], _}]] &)),
         "Label" -> Style["Mainland", Bold]|>
       |>
     |>];

I'm still a learner in this Wolfram thing, but I have a background in object-oriented programming, so I'm always thinking in "interfaces" that needs to be implemented. And that is what I currently don't understand with the Wolfram knowledge framework. Why is the "interface" to do all the geo-stuff not described? Some functions obviously need "Position" (e.g. GeoGraphics), but others need more. But what is this "more"? Or is this not the idea of the framework that everyone can build own EntityStores which gives back entities that can be used together with the existing functions and other Entities?

Sorry, I missed the use of a custom EntityStore. The error you got suggests that position information is not available for those counties in the custom store. Try evaluating c1["Position"].