Caltech and other top-tier schools (MIT, Princeton, Berkeley, Chicago, etc.) won't have the problems this was described as addressing, namely students who are at the school but don't care about getting the education. It makes sense that "student-athletes" were the original targets- having a majority focus on sports instead of scholastics has been a real problem in schools with strong NCAA men's programs.
There's another background problem here: young adults being given the assumption that they need to install someone else's nanny on their own phone. In the work world, if your employer needs you to use an app on a device, they need to pay for the device- there is no way they can force you to spend your own money on their business requirements. (Unless your employment contract says you need to maintain a smartphone or similar, I've never seen that though.) I have a feeling that carrying school apps on your phone will erode that understanding.
And this app sounds like a nice hacking target. I won't elaborate any doubts about the app security or the backend service security, let's just see what happens.
Very likely, the schools that are prone to having the problems will institute this more and add more institutional conformity while the schools that aren't won't. The students that go to these institutions will assume more background surveillance while the students to go to better schools will be free of it.
If I were back in school I'd probably just give up the attendance points. But I didn't go to a school that was likely to use this