Since there’s going to be time that we have at least half a dozen Bluetooth-enabled devices with GPS capabilities in any given 100m radius area, then why not use this information
concentration to benefit all?

Usually a single device has some trouble getting GPS signal,
and the initialization takes time; sometimes it’s just 5-10 seconds, but it may well
be in the order of several minutes in worst case. The idea is that devices could poll others to give them information about the correct location. A single device could then
average the given answers and find out the location to a certain degree of certainty and
resolution. By filtering out the most deviant answers, devices could protect themselves
from being fooled.