Setting mock location in FusedLocationProviderApi

I'm trying to get mock updates from FusedLocationProviderApi, but I can't seem to make it work. This my set up method in android instrumentation test:

locationProvider = new LocationProvider(InstrumentationRegistry.getTargetContext().getApplicationContext(), settings);

// Connect first, so that we don't receive 'true' location
locationProvider.googleApiClient.blockingConnect();
// Set mock mode, to receive only mock locations
LocationServices.FusedLocationApi.setMockMode(locationProvider.googleApiClient, true);

InstrumentationRegistry.getInstrumentation().runOnMainSync(new Runnable() {
    @Override
    public void run() {
        // Start receiving locations; this call will connect api client, and if it's already connected (or after it connects) it will register for location updates
        locationProvider.start();
    }
});
// wait until we can request location updates
while (!locationProvider.isReceivingLocationUpdates) {
    Thread.sleep(10);
}

After this point I would expect any calls to LocationServices.fusedLocationApi.setMockLocation(apiClient, location) to set mock location that my listener would receive. Unfortunately this is not the case, and the listener stays silent.

My foolproof (or so I thought) method to set mock location looks like this:

private void setMockLocation(final Location location) throws Exception {
    assertTrue(locationProvider.googleApiClient.isConnected());
    assertTrue(locationProvider.isReceivingLocationUpdates);

    final CountDownLatch countDownLatch = new CountDownLatch(1);
    LocationServices.FusedLocationApi.setMockMode(locationProvider.googleApiClient, true)
            .setResultCallback(new ResultCallback<Status>() {
                @Override
                public void onResult(Status status) {
                    assertTrue(status.isSuccess());
                    LocationServices.FusedLocationApi.setMockLocation(locationProvider.googleApiClient, location)
                            .setResultCallback(new ResultCallback<Status>() {
                                @Override
                                public void onResult(Status status) {
                                    assertTrue(status.isSuccess());
                                    countDownLatch.countDown();
                                }
                            });
                }
            });
    assertTrue(countDownLatch.await(500, TimeUnit.MILLISECONDS));
}

Method returns successfully, but no location is received by the listener. I'm really at a loss here. The worst part is sometimes the test would pass, but extremely randomly (to a point when the same code executed several times would pass and fail in subsequent calls). My debug manifest, for completeness, has following permissions:

<uses-permission android:name="android.permission.ACCESS_COARSE_LOCATION" />
<uses-permission android:name="android.permission.ACCESS_FINE_LOCATION" />
<uses-permission android:name="android.permission.ACCESS_MOCK_LOCATION" />

I have allowed mock locations in settings.