"Evil" is a bit loaded, but what that level of accuracy does is let you say "this person was in front of the shelves for products X, Y and Z" as opposed to "this person was probably in the store".

Hyper localized association. Like, for example, a dissident organizing a local chapter of some organization who disperses information via in person hand offs of handwritten papers every. In this example, their hand off point, in a small town of tens of thousands, is the Saturday farmers' market that runs from 8 until 5 or so. They and their conspirators all went to the farmers' market regularly before so it's completely natural for them to appear within 5-10 meters of each other a few Saturdays a month (usually because the three most popular food trucks have long lines right next to each other). Except now "evil" can roll up the ringleader and see a pattern of who passed within an arm's reach every time the ringleader got a message from the head organization without actually spending the resources to surveil anyone in person.

"Evil" usually doesn't care enough about most people to spend significant resources surveiling them. The danger in dropping that threshold is that "evil" invents new ways to exploit any efficiency.

Tracking isn't just by connection. Their point is that bluetooth tracking (by beacon or otherwise) is already a thing - many major retailers and franchises already do it.

It's ridiculously easy to turn any Bluetooth device into a beacon. All you have to do is configure the BLE advertising frame for the device and then set the device to advertise. I can turn my laptop into a beacon in about 5 minutes(some web searching to remember exact commands and formats).

Qualcomm's latest flagship soc (865) with 5G has Bluetooth 5.1 support as far as I know.