My understanding is this Tag works on BLE (bluetooth) - so when in range of the Phone (say 20 feet max) it tells the Phone where it is.

As soon as out of Bluetooth range - the software will say its separated and its last location was X.

Thats it.

Once a bag goes off into the Baggage system, the notification with trigger, and Airtags will not have any value to you.

The TAG is unable to tell you where it is - unless of course it comes into range again.

These devices are for items that dont move (car keys in your house for instance) - not luggage which is designed to be separated from you.