I've had delayed bags on UA and they were able to tell me which flight # they were loaded. In one case bags deliberately not loaded due to weight and sent on the next flight (RJ flight). Another case, bag routed differently than myself for some reason. In another case, baggage handlers in Narita put them on the wrong flight and they went through customs hold in the wrong country.

I don't see the physical labor happening either but the data is certainly captured.

Likewise when I interline from UA onto Singapore Air, the Singapore Air check-in agent is able to confirm the bags were transferred and accounted for when I give them my baggage stub.

Baggage scan/trace is one of those unimportant waste-of-money features that becomes important and more valued when something goes wrong.