How is contact tracing supposed to work if the info given is fake?

[canetoad]

5. The app being distributed in Australia

Does not electronically go through your contact list, instead relying on a bluetooth signal to and from other phones.

Released on Sunday, COVIDSafe uses Bluetooth to connect with other phones within 1.5 metres (4.9 feet) which also have the app installed. If they are in contact for over 15 minutes, the app records data such as the date, time, contact distance and duration, and the other user's encrypted identification code. This information is stored on the user's phone for 21 days, after which it is automatically deleted.

Therefore, if someone using COVIDSafe is diagnosed with COVID-19, health officials can use the patient's app data to quickly notify people they've been in contact with. The hope is that this will help contain outbreaks and slow the spread of the coronavirus.

https://mashable.com/article/covidsafe-australia-government-coronavirus-tracking-app-privacy-security/