Gee, I wonder why Lufthansa didn't like airtag.. has nothing do do with "safety," being as how they're powered by a CR2023 coin cell, but more like "We don't want you to know where your bag is. It is where we say it is!"
The answer is simple for airlines. Airtags generate completely pointless customer service interactions and make customers angrier. The fundamental problem is that bags are rarely lost. They are always somewhere, they have multiple barcodes on them, they are part of a complex system of getting from their wrong location to the right location, and that system itself has zero ability to deal with irate customers.
Your bag is somewhere. A ground services contractor responsible will eventually scan it in a big pile and work with the airline to find out where you are and get it to your destination. The airline isn't in control of this process. The best anyone could is tell the ground services team to keep a look out for a bag which looks a certain way in a pile to which the very lowly paid employee will typically say "LOL No! You'll get it when you get it."
All the airtag does is make you call an airline who isn't in control, providing them information that won't be relevant to them, and because they don't have a clue what's going on you will be irate because you'll feel you're dealing with someone incompetent. Knowing where your bag is doesn't do anything for you in the slightest. It only stresses you.
I was once in a flight where a guy was using his phone as we were taxing getting angry and irate at the stewardess because the airtag showed his bag wasn't on the plane and we were taking off. A calamity. The guy was pissed and making a fuss half the flight. We land at the destination and ... well his bag was there, the plane was overloaded so it went on another flight that was leaving around the same time.
Don't be a micromanager. You shouldn't use airtags, you should demand competence.