As an ex mobile app developer (still developing, just wandered into a different direction) I’ve a vague idea how this could be done. However, unless in the past 4 years Bluetooth has a) become more secure (you’d get dick pic’d on the Tube) and b) the Bluetooth battery draining issues have been resolved that alone would get my Spidey senses tingling it’d be a bit crap.
Of course, it could be argued that ‘you shouldn’t be out too long, so short battery life isn’t an issue!’ by the Powers That Be. Although it took 3 hours to do a Pharmacy run (queue), queue at Sainsbury’s, do shop for us & 2 shielded family members etc last Thursday...
Don’t worry about it knowing your location though. Your phone does that anyway! Our company was at the forefront of Location Based Services in 2003. That’s 17 years your phone has been able to know where you are! You’d triangulate location based on 3 cell phone masts. I think telephony on the phone still does that (although geo services are satellite based now - think services like Google Maps). Photos are geo-coded. Likewise FB posts, tweets, Google searches...
It’ll be interesting to see the Apple api for this.
Ultimately, until there is more comprehensive testing for COVID, the app is pretty much a crap shoot for false reporting of any sniffle, trolling etc.