I fail to see the difference. You say it doesn't use GPS, but then continue to say that it uses location data (and thus, I assume, GPS). So which is it? Or are you saying that the app doesn't receive the user location data, only Google does?

On android, a lot of APIs that have nothing to do with GPS (such as watching wifi networks, looking for devices on the same network, etc.) actually need the "location data" permission.

This is misleading, but it is made so because one could potentially use data harvested through those APIs to infer your location (for example, if an app has a map of wifi networks, knowing which networks are around allows it to infer your position)

Neither the App nor Google use location data. However, Google still prompts your for these permissions because, in their mind, the swapping of rotating IDs presents an indirect way of tracking somebody's location (although that data is solely stays on the device and is never transferred, unless a positive person decides to upload the list of IDs there were in contact with)

Thank you for the clarification! So the app does use location data, but it is (maybe?) not uploaded.