I hope this isn't the case... it certainly isn't on the Surface Pro 6. Erasing works fine, it's just clicking the eraser end of the pen that requires Bluetooth.
Well, you have to communicate the clicking of the button somehow, right? I usually click it with my thumb - if it had to be within range to do that, it wouldn't be that useful, cause I'd have to ... I guess hold the pen upside down and click the button right on top of the screen? That certainly isn't the first way I would have tried to do it.
It lets you launch OneNote from sleep out of pen input ranges, that’s the reason.