Yes but does it matter if your BT is turned off _visually_? The device can still send data.
Besides, receiving consumes more power than sending, theoretically Apple can just shut off the receiving part and send intermittently (every 2 sec or so) and achieve very minimal power usage.
Again, this is just speculation, I’m genuinely interested in the details.
Low power devices like AirTag rely entirely on Bluetooth LE and the Find My network to determine their location.