In shell break does not exit case blocks, so break 1 is enough.
The POSIX test suite requires features of GNU sed, use it explicitly.

Index: locate-test
--- locate-test.orig
+++ locate-test
@@ -85,7 +85,7 @@ do
           exit 1;
           ;;
       *)
-          break 2;
+          break;
           ;;
   esac
 done
@@ -113,7 +113,7 @@ find "$WHERE" -type f \
     $buildable $execs \
     | if [ $print_execs -eq 1 ]
         then
-            sed 's/\.\(sh\|c\)$/.test/' 
+            gsed 's/\.\(sh\|c\)$/.test/' 
         else
             cat
         fi