First this is not just Android. Apple does the same thing. You can buy an iPad which physically does not have any GPS hardware and it can reasonably tell you where you are. Personally I first learned of this feature when I bought a second-generation iPad, so it’s been there a while ago.

Second, it is a logical leap to assume Google knows everything already. They could for example build this nearby Wi-Fi based location querying API with privacy in mind, by purposefully making it anonymous without associating it with your account, going through relays (such as Oblivious HTTP), use various private set intersection techniques instead. It is tired and lazy to argue that just because some Big Tech has the capability of doing something bad therefore they must already be doing it.