I think the Garmins always use the speed sensor instead of GPS if it's available. It's more accurate, and the unit wouldn't be able to tell immediately if the GPS signal wasn't good enough to use.
The older GSC-10 Garmin sensor is both speed and cadence. The speed sensor is faster to respond to stops than the GPS calculated speed. And I like having the cadence sensor. For the cadence, I use a strong neodymium magnet stuck to the end of my pedal spindle.
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Here's an example of GPS inaccuracy near trees. It's interesting that one direction was accurate, but the other way drifted off the road. This wouldn't be enough to affect the speed calculation, but similar discrepancies at a slow speed during climbing in the trees would make a bigger difference.
Riding between 20 story buildings downtown shows way more drift--the signal from the satellites bounces off the buildings, affecting the distance calculations. Each dot is a GPS recording at one second intervals.