How to validate string length with Mongoose?

Much simpler with this:

var LocationSchema = new Schema({
  code: {
    type: String,
    trim: true,
    uppercase: true,
    required: true,
    maxlength: 2
  },

https://mongoosejs.com/docs/schematypes.html#string-validators

The field "code" is validated even if it is undefined so you must check if it has a value:

LocationSchema.path('code').validate(function(code) {
  return code && code.length === 2;
}, 'Location code must be 2 characters');

The exact string length is like:

...
minlength: 2,
maxlength: 2,
...