Yes, the summary is missing the point, because it's a summary and that's just how articles work these days. It's a purposeful race to the punchiest headline and is so ridiculous... but here we are. Railing against it is sort of like complaining about being wet because you are standing in the rain.
But yea, it was the GPS coordinates of the device(s) that "saw" the AirPods that were reported to FindMy. Since the phone(s) with the strongest BT signal from the AirPods was/were in the house closest to the curb where the AirPods were located, it was that location that was reported.