You might realize this, but just for clarity, Bluetooth LE has similar range to Classic Bluetooth, with the exception of 125kbps LE long range coded PHY, introduced with BT5.0. You can potentially reach from 1km away outdoors.
The Nordic Semiconductor NRF52832 used in the airtag, unlike NRF52840, does not support this.
Apple seems to have removed support for long range coded PHY from iOS as well, so other vendors can't make use of coded PHY either. It was present in iOS 13, seems to be absent from iOS 14.