The location permission is not needed to use Bluetooth on Android, but apps must request it to be able to scan for nearby access points and beacons (both for wifi and for BT), since this information can be used to infer the device's location. Fun fact: turning off location services without revoking the location permission still allows apps to scan for wifi access points and infer your location with impressive precision. The list of apps that have the scanning permission is hidden somwhere deep in system settings.