But I didn't touch my phone that night... I'm not sure what happened exactly, the fact is - it made me super uncomfortable.

It looks like Facebook asks for Location: Always on iOS. (I've got mine set to Never.) I wonder if they feed this back to the servers.

I presume you didn't post anything about the "event" to facebook (I've seen "Person is going to attend Blah" posts before) or "check in".

I had once looked up someone I knew from college on Facebook, and their name appeared immediately, weeks later I realized they were trying to find me before I was trying to find them! The other person probably looked you up, and other factors pushed Facebook to suggest them.