Notice the difference in color when you do that. As the other comment pointed out, it only disconnects devices. Apple makes it hard for their users to disable bluetooth (or gps) so features like airtag work well.

You are sacrificing your battery life (and I guess privacy and security) for the ecosystem to work.

Google won't let you use GPS for maps without also turning on wifi for similar reasons I guess. It does make it more accurate but shouldn't be required.

Wasn’t there this thing that Google collected a list of SSIDs using their Google Maps cars, and that gave them “good enough” geolocation using passive WiFi scanning, which was much less battery intensive and faster than GPS?

That's nonsense, Maps works perfectly fine with wifi off

They might have changed it again, but it was a thing, I saw the prompts mentioned here too:

https://news.ycombinator.com/item?id=30167865

That’s unfortunately only disconnecting until the next day (see text appearing above when pressing).