The headword occurs in (and is very probably quoted from) Callimachus, Iambi fr. 225 Pfeiffer: xai=r' *Eu)koli/nh, 'hail, Eukoline'. According to Etymologicum Magnum s.v. (also in the Additamenta in Etymologicum Gudianum s.v.), Callimachus uses the word as an epithet of Hekate (epsilon 363, epsilon 364), coined by antiphrasis -- because she is not good-natured (eukolos).
Why then does the Suda lexicographer gloss as he does? The reason seems to be that the suffix -inh is common in city names -- among which Eukoline seems to be mentioned in Herodian (De prosodia catholica 3.1.333.18) and Theognostus (Canones 691.7).