I really freaked out the 1st time that happened when I was using my phone for the P4 that day and was quite relieved when nothing happened! The next time, I just answered the call and put it on Speaker.
Nothing will happen except the notification you will get on the screen and then you can just hit cancel or ignore. You can also fly in airplane mode or turn off cellular so you do not receive calls while flying.
Actually, no it does not turn off the GPS. All that airplane mode does is shut down all protocols that can transmit. Since GPS is a receive only function, it is not affected.