Microchipping dogs makes a lot of sense. What are the privacy concerns though? If someone wants to hunt a person down, I imagine the microchips in the dogs would make a great tracking device.
They don't. The range of a typical chip reader is a few inches - reading one requires handling the dog (and can be tricky if the chip's migrated from its expected position). It's not something that can be done covertly, or from a distance.
Some owners do use GPS trackers or AirTag like devices.