Display related CPT with custom taxonomy

I was building something similar a couple of years ago, here’s what I did, maybe it helps … (changed to your use case)

$result = new WP_Query([
    'post_type' => 'location',
    'orderby' => 'name',
    'order' => 'ASC',
    'posts_per_page' => -1, // all of them on one page
    'tax_query' => [
        [
            'taxonomy' => 'services',
            'field' => 'id',
            'terms' => $custom_term->term_id,
            'include_children' => true
        ]
    ]
]);

So you already are pretty close. What I noticed is, you use $custom_term->slug but it should be $custom_term->term_id as far as I know.