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I believe that permission is only needed for the Find My App itself (so that it can display the map correctly centered w.r.t where you are).

I don't think it affects finding that device from other devices.

Oh wow, this is true for me as well. Need to check if the app permission is required or if the location tracking works separately through some system service.

If you mean the Find My Device app it only asks for foreground location permission so I would assume the actual device "beacon" is part of the system not that app.

I've lost a phone with location tracking turned off. You can still disable the phone remotely and assign a lock screen message for the findee to contact you.