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explore prefer device location

what does the prefer device location setting in the maps do, when paired to my device and during an activity , it shows a bluetooth symbol , but the arrow does not move when on .

if i turn it off the bluetooth symbol disappears , but there is a blue circle around the arrow , this dissapears when sync current activity is off.

do any of these settings allow the use of location from the gps device rather than phone location , for saving battery on phone and providing more accurate location tracking