Code demonstrating issue
(comment/uncomment out the gl_Position lines in the vertex shader)
It is also worth looking at how it is done in Three.js and their SpriteMaterial: sprite_vert.glsl
Here is an annotated snippet:
// optional: pass 2D rotation angle as an uniform
uniform float rotation;
// optional: pass 2D center point as an uniform
uniform vec2 center;
// optional: use this define to scale the model according to distance from the camera
#define USE_SIZEATTENUATION
// [skipped includes]
void main() {
// discard rotation and scale
vec4 mvPosition = modelViewMatrix * vec4( 0.0, 0.0, 0.0, 1.0 );
// extract model's scale
vec2 scale;
scale.x = length( vec3( modelMatrix[ 0 ].x, modelMatrix[ 0 ].y, modelMatrix[ 0 ].z ) );
scale.y = length( vec3( modelMatrix[ 1 ].x, modelMatrix[ 1 ].y, modelMatrix[ 1 ].z ) );
// if not defined, keep model the same size regardless of distance from the camera
#ifndef USE_SIZEATTENUATION
bool isPerspective = isPerspectiveMatrix( projectionMatrix );
if ( isPerspective ) scale *= - mvPosition.z;
#endif
// if center is not passed as uniform, create vec2 center = vec2(0.0);
// aligned with the camera [and scaled]
vec2 alignedPosition = ( position.xy - ( center - vec2( 0.5 ) ) ) * scale;
// if rotation is not passed as uniform, skip the next block
// rotate 2D
vec2 rotatedPosition;
rotatedPosition.x = cos( rotation ) * alignedPosition.x - sin( rotation ) * alignedPosition.y;
rotatedPosition.y = sin( rotation ) * alignedPosition.x + cos( rotation ) * alignedPosition.y;
// billboard
mvPosition.xy += rotatedPosition;
gl_Position = projectionMatrix * mvPosition;
// [skipped includes]
}