What unencrypted location tracking does this comment refer to?

Not sure I agree here. Most Bluetooth Low Energy devices (aside from Apple Devices and Android phones) don't make use the privacy feature and therefore their device address can be linked to a specific product. Many Bluetooth products have user accounts attached to them (think fitness trackers and AirTag-like products) meaning that the device address can be tied to a specific user.

Now consider the vast number of “smart nodes” out there (eg street lights) that have multi-protocol connectivity built into them. Whoever controls these nodes can simply scan and log every BLE advertisement that is nearby.

I’m not saying that this is the only way that a person can tracked or that this kind of tracking is definitely happening right now, but it’s a very real possibility.