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air tags function by utilizing the ad-hoc network all Apple devices create - if you run an Apple device, you're involuntarily part of this P2P network, even when your device is supposedly off. otherwise, said tags wouldn't be able to send you status reports from the other side of the planet. that's just how they and find-my-shit apps work, there are no alternatives to global availability.
all that's kinda antithetical to the whole privacy thing, so you'll have to balance the good with the bad and determine how much spyware you will tolerate to gain this sort of convenience.
Do you have a source for the “even when your device is supposedly off” part? I know iPhones have tracking enabled when off, but there’s no way they’re using Bluetooth to find these devices and reporting back. I can’t find a source for that at all.
But even then, it’s still pretty private because there’s no way to reverse track an AirTag. I don’t even think they can do that internally at Apple.