Much like an Tile or AirTag is implemented. No comment on what this is capable in the future.. but for now this shows power usage / signal strength / proximity of other “actually on” devices are a limitations of this feature.
What’s impressive is the mesh network effect of all these iPhones / iDevices to locate a “lost” device. I’ll be thankful if I manage to use this to retrieve a lost phone. I’ll be pretty shocked if I’m “spied on” with this style of device.