Pixelpioneer88 For the moment, the feature only uses Wi-Fi and it will be extended to cell towers. As for Bluetooth, I don't know, and I'm not sure it has anything to do with the feature in question.
If you use the Wi-Fi of your local network or public Wi-Fi, you don't need to turn on the Wi-Fi scanning, just turn on Network location in Location service.
If you don't use Wi-Fi, the turn on of Wi-Fi scanning allow the device to scan nearby Wi-Fi networks to help you find your location.
On the original operating system, the Wi-Fi and bluetooth scanning are always on, you cannot deactivate it to improve privacy.