The Fused Location Provider can only use mock locations provided by setMockMode() and setMockLocation(). Calling android.location.LocationManager.setTestProviderLocation() has no effect on the locations generated by Fused Location Provider.
Although FakeGPS won't do anything for Fused Location Provider, the new Android training lesson for Mock Locations: Testing Using Mock Locations includes a sample app that injects mock locations into Fused Location Provider.