Be patient, it needs a bit more time in the oven.
I found its spotty when your inside. I imagine thats just because its hard to track something that has a 100 ft margin for error. It should be obvious that if your device can't pinpoint itself it won't be able to provide "Live Location".
I have about 10 friends on Find My and only one of them is "Live" and he was out of the house, driving. This leads me back to the position resolution being a factor. Movement can also play a roll, if you are stationary why would the iPhone allow someone else to kill your battery? Also when I tried to screen record his movement to send to him the "Live" icon went away and it went back to its "Now" and "X minutes ago" as soon as I ended the screen recording it went Live again.
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So then I took my iPhone 11 Pro Max and iPhone SE 2nd Gen around the block for a walk (don't worry it was more pathetic than it sounds). Within no time the SE was "Live" as reported by Find My from the iPhone 11 Pro Max. However I couldn't get the iPhone 11 Pro Max to ever go live. Does the iPhone 11 Pro Max have a less efficient GPS than the SE? The tech specs list them the same...
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Finally, Apple doesn't have too much information out there on this. They don't have a white paper for it either and they are pretty good about putting out white papers for security and privacy features...this is both. Just expecting to see how its encryption works and what the prerequisites are to start it. But last white paper I can find for Location Security is from Nov 2019.
Anyway, I think this is something that will still get some more refinement and more information of how and when it will be active.