Earlier quoted context omitted.
According to Google Bluetooth requires location, because it van be used to find your location. So there is some reasoning behind this decisions, although I wwould be mutch happier with something like: Location (Bluetooth), location (GPS), location (WiFi) >A location permission is required because Bluetooth scans can be used to gather information about the location of the user. This information may come from the user'…
Please take a step back and look at this again. What is the cause and what is the effect here? Is Google's solution making it better or worse from a practical privacy point of view? (Also, don't buy Google's explanation that this is just to inform users of potential misuse - they actually log your location and even wait for a GPS lock when you pair a new device)
If an app that uses bluetooth can get my location via beacons or etc., then bluetooth should be wrapped in location privileges. An app that I do not want having my location should not be allowed to use bluetooth, and I have to accept that any app that does use bluetooth could get my location.
While it does mean that apps that use bluetooth now have a slightly easier way of getting location (i.e., via phone GPS, not just bluetooth), we shouldn't obfuscate that bluetooth is another way to get that information. In the end, you are trusting the app developer with the privilege of knowing your location. If you don't trust them with that, then they can't be allowed to use bluetooth, full stop.