I do not believe that you can dynamically filter the selection of one custom field based on the current selection of another and change that choice for the administrator. You can filter the options displayed in your fields with a query modification very similar to WP_Query, and Iām sure that this cannot be done on the fly.
I would almost cheat and, instead of assigning posts with a taxonomy, includes both the location and the location in the message name itself.
So say post [Museum of London] with taxonomy [London]
will become
[London] [Museum of London]
[London] [Hyde Park] ... etc.
or something similar. I assume that you only want to assign one location to a specific locality ...
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