The app isn't to know whether you're on the clock; the app is a digital whip cracker to keep employees constantly working 100% of the time that they claim to be working.
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Which, in theory, wouldn't be a bad thing... if this was combined with a sufficient number of break-minutes per day, to be spent flexibly. Whenever you're not doing the "doing your job" movement pattern, the app could automatically mark you as being on break. If they calibrated the number of break-minutes to the actual average observed productivity of employees in each role across the industry, then the app would have a useful output — allowing employers to figure out who's doing less work than average. (And employees+unions could also use the data as evidence for uncompensated overtime disputes.)
But of course such a system won't be used/configured that way. Employers will instead wrong-headedly assume that their employees should be capable of productive output 100% of the time that they're not on their 90 minutes per shift of legally-mandated break time; and then will randomly punish/fire employees for taking "extra" breaks, even when those "extra" breaks merely bring them to the industry average level of productivity.