Not sure if google is particularly different but the way this works for the other services is basically low energy bluetooth scanning coupled with the phones providing their location*. So basically all the devices on that scanning/spy network periodically ping/listen for nearby devices/trackers. When it finds one, it sends a quick message to the servers with that phone's location and the ID of the tracker. Get enough of those pings and you can triangulate the position of the tracker pretty precisely.

Which... is why this fundamentally does not work with "hacker" solutions that allegedly emphasize privacy. Because you just don't have enough devices listening. This was painfully obvious with tile back in the day and is still an issue with Samsung in some countries.

*: Via a combination of gps, cell tower, and wifi network scanning. The less obvious part of that being wifi networks which is the majority of how interior positioning works.