Seems kind of ridiculous that in order to opt out of Apple's airtag network you essentially have to give up the ability to find your phone if it gets lost.
No this will just turn off the ability to find your phone by using other people's phone. You will still have the phone report its location and be able to locate it in "Find My" but lose features such as being able to find the phone if its out of battery/turned off/not in cell reception range.
Find My iPhone primarily uses the phone to self-report its position when requested over the Internet.
This new "Find My" network (what a stupid name, btw) also allows to use other devices to report positions of nearby devices for those that don't have a data connection (AirTags or iPhones that were powered off).
The problem seems to be that a single toggle controls both features, while the first feature doesn't rely the community network and should remain available even if you opted out.
As others are mentioning, I see two toggles, and the second toggle is "Find My network" which is the one that works by other people's iPhones detecting your iPhone even when it's offline, in power reserve mode, or powered off.
This is not how it works. There are two different toggles, one for the Find My system, and one for just having your iPhone report its last condition. If you dont care about being able to find your phone/devices when theyre off, then you can simply opt out of the Find My network and rely on the basic position reporting.
As I understand it, Airtags are low-power Bluetooth devices with no GPS capability.
If your Bluetooth transceiver is disabled, your iOS device will not see nor report the locations of any Airtags that are otherwise in range.
If you do enable Bluetooth on an iOS device, any Airtags detected will be reported to Apple over any available data connection, and this cannot be disabled in iOS as far as I know.
Disabling Bluetooth will likely save any device's battery. This is separate from GPS and mobile data.
> If you do enable Bluetooth on an iOS device, any Airtags detected will be reported to Apple over any available data connection, and this cannot be disabled in iOS as far as I know.
That certainly seems to contradict Apple's own documentation on the Find My network. At least according to my interpretation, it seems very clear that disabling the "Find My network" toggle will disable your device's participation in the network.
It seems pretty clear to me that the setting is symmetrical, and disabling it prevents your device from being discovered by other devices and from sending messages about other devices it discovers:
> Find My can use the Find My network to help find devices even if they are not connected to the internet and, for supported devices, even if they are turned off or erased. Devices in the Find My network use Bluetooth wireless technology to detect missing devices or compatible items nearby, including AirTags and compatible third-party products registered to your Apple ID, and report their approximate location back to the owner. If a device is turned off or erased, that location is also visible to members of the owner’s Family Sharing group with whom they have chosen to share the location. The interaction is end-to-end encrypted, and Apple cannot see the location of any offline device or reporting device. When your device participates in the Find My network, it can both be located by the network and anonymously help locate other missing devices. You can choose to have your iOS or iPadOS device not participate in the Find My network by going to Settings > [your name] > Find My > Find My [device] and tapping to disable Find My network.
Image of the current settings and explanation: https://imgur.com/a/TepOqb2