I haven't found any solid statements of where this mythical wonderland of steam exists on earth, so i decided to take a crack at theory craft. In case you are wondering, this does happen on earth, that much is certain. Also, one of my main pieces of evidence might be an oversight by Muse, but I doubt it. The solution just fits so perfectly.
Well, right off the bat you can say this world is definitely not in the Americas. There's too much history and European architecture in Labyrinth that proves otherwise. By the way, a lot of my guesswork is based on that massive city, as there isn't much given anywhere else. Labyrinth is the only link to our timeline we really have. That said, this also can not be in Africa, Australia or even Asia. Let me explain Asia for a second, as the Yeshan Empire is derived pretty much of complete Asian culture. There just isn't enough cities in that part of Russia, and not to mention the biggest clue we have, is the language of the original people of Labyrinth. Below, I posted a picture of the only remaining sign in the map from the time, its of a hotel. You can't really make out the name of it, but you can definitely see all the letters of the word "HOTEL". That alone tells us that Labyrinth was in a part of the world that used a modern English or like-English alphabet. So, now we have Europe, and with information gathered from the official website and here, we know that the north piece of the map in Alliance its at the edge of a massive ice sheet that blankets the earth from the north pole. That, along with the information that hotel in french is hôtel(throwing the entirety of France out of the question, even though the nearby town is called "Paritan"), takes out any southern European contenders, even though hotel in Spanish is hotel. Now, we have only northern Europe excluding countries with Slavic languages. So, pretty much, all we have left is Germany if we assume the temperate zones that make up the Firnfeld are actually pieces of anywhere Stockholm, Sweden down, that gives us Germany and Poland. Looking at Labyrinth, the pointy architecture on the railway and the construction of the clock tower all point to German styles over the Polish. Now, our only option is Germany, but wait you say, the current world looks nothing like the one in the Alliance map. Well, on the website there is a list of book names that supposedly explain everything (just the names and dates of their coverage) and the first book on the Great War has a timeline of 50 years. Then, the Red Death(sequel) lasts another 50 years all equating to a century of old world conflict. In the first fifty, keeping the trailer for Co-op in 2014 in mind, massive bombing would have happened everywhere. With all the technological advancement it isn't too much of a stretch to say that places like Poland, being the eastern front, was bombed into oblivion. This bombing and excessive resources required to sustain the armies and ships like the Leviathan and other sea-faring ships you see lying around the Firnfeld would have put massive strain on the environment, causing deserts in the forests of France (Arashi Desert) and the sea surrounding Chaladon(which we are now assuming as a surviving piece of Poland, or Polish wilderness). Also, the ships that are just left in the middle of canyons in the Firnfeld indicate there being a sea there, that sea could have very well been the North or Baltic seas. How the Yesha Empire existed in old France, well, it was 300 years. Perhaps Asian peoples sailed over there in that time, or a massive population of Asian people were gunned down over there. Maybe France is just exterminated by Asians and colonized during the war. The Mercantile Guild on the other hand, strongly enforce this theory. They are a nation of strong Venician influence, and Venice is right below Germany. On a final note, The Labyrinth, is probably Berlin or Frankfurt. That is if it is any city that existed before the Great War. The narrow streets and architecture, as I said before, strongly suggest that.
TL:DR (that really is a big wall of text, woops)
The Hotel picture below along with architecture from Labyrinth prove the location to be northern Europe. It can't be France (even though the town is called "Paritan") because they put a silly thing over the O in hotel that can't be placed on that sign (no supports or evidence of it, it also just doesn't work in that font). The mercantile guild to the south is from Venice, the sea-faring ships littering the Firnfeld suggest a dried up sea (the Baltic or North sea) and Germany is right in the middle. Its in Germany, and Labyrinth is probably Berlin or Frankfurt. It also makes Poland a sea except Chaladon, and France a desert run by Asians. Within the three hundred years, Asians either sailed over there or during the war a massive ship (or fleet) from Asia was gunned down around there, or maybe they took over France and got stranded, who knows.
Thank you for reading, if you think I missed anything or think I'm blatantly wrong please let me know. This kind of theorizing is really fun.
The Hotel (The E fell down a bit, but it's there)
The Clocktower
Nice Easter Egg Muse