From my understanding, apps need location permissions if they want to scan for available bluetooth devices rather than having the user pair in the bluetooth settings app. The reason being that advertisers set up bluetooth beacons all over the place and used passive scanning in apps to collect the users location.
What's not clear to me is why they really need to be able to scan for bluetooth. Surely requesting location permissions is worse UX than having the user go to the settings app to pair.
The lowest common denominator user is more afraid of visiting the settings menu than they are of clicking allow on just about any permissions popup.