Seems to me like a solution looking for a problem.
What specific purpose does this "connected luggage tag" serve which is lacking in an old fashioned, low-tech "traditional" luggage tag?
Do bags get "lost"? Sure. But I'd venture that in the vast majority of cases, they don't really get "lost" (ie, disappear forever), they just get delayed. In 99% of "lost luggage" cases, it just misses your flight and either goes on the same airline's next flight (up to 24 hours later) or gets routed somewhere else and needs to be tracked then re-routed. I've had a checked bag that was missed during the flight loading a couple times; it was always delivered to me at my hotel or at home within 24 hours. An inconvenience but not a disaster.
I tend to not checks bags on an outbound flight, especially if I'll be moving on from my initial destination within 24 hours (makes it harder for a missing bag to catch up with you) but I happily check bags on my way home.
Honestly, bar-coded and QR-coded paper tags appear to be incredibly reliable. They work flawlessly for millions of bags every day. I see zero benefit in some purported "smart tag". So what am I missing?
(Note: I generally react negatively to any marketing campaign that pre-pends the word "smart" to a product...IME in almost every case, that so-called "smart" product is a scam that provides no actual benefit to me, only to those pushing the "smart" agenda...beware when someone tells you that you need the new "smart thing"...but that's probably just me).