I think the person you're responding to is misremembering the scandal. It was that Facebook, Google and similar (iirc it was mostly Facebook, Google were doing this with WiFi networks they had built an index of through Street View) would use Bluetooth on your phone to scan for nearby devices, and match them against known other devices and their location, thus deducing who you meet and where.

They even have a patent for that exact thing: https://www.wired.co.uk/article/facebook-phone-tracking-pate...

But if they want to match it to your Target Circle account they need you to be using the app. Also iOS uses BLE address randomization to make tracking a specific individual more difficult. Having your app blast out a known ID bypasses this

https://techcrunch.com/2017/09/20/target-rolls-out-bluetooth...