They use a combination of Bluetooth and nfc and maybe some wideband spec (though I think the wide and stuff is just for when you go in searching) . Basically anytime it’s near another iPhone, the iPhone picks up the tag ID and sends it in.
If it detects a lot of checkins to a phone that isn’t on the same Apple ID, the AirTag will make noise (as an anti-stalking measure)
I believe a recent patch also allows android to report in status, or maybe that’s coming but still in the works. Not sure.