A feature that could disable certain permissions for a single app was briefly introduced in an earlier version of 4.3.x, but was removed again shortly thereafter. Apparantly, most apps were written to expect permissions to be granted and crashed pretty hard if they didn't get their way.
It is available for rooted phones running Stock Android through the Xposed framework. There it is called "AppOpsXposed".
I can understand that disabling permissions the app expects will fail, but faking the service the app expects permission for sounds like something that should work, and would be very valuable.
Yes, definitely. XPrivacy can fake data, so that works even better than AppOps, but is harder to set up.
I also miss the possibility to give slightly fuzzed/offset values for certain things, like GPS granularity (Do you need to know my exact location, or just my country?) There's however an eternal struggle between the API devs wanting to make the permission system simpler, and the APP devs wanting it smarter and more refined.
It is available for rooted phones running Stock Android through the Xposed framework. There it is called "AppOpsXposed".