What's funny for me though was with iOS14 I didn't have a lot of impacts (I had iPhone Xs though). Also, I got rid of Tiles because it was draining so much battery with my iPhone Xs on iOS14 at the time, but now iPhone 13 Pro with iOS 15 is equivalent to Tiles.
I wonder if I need to re-format my iPhone and start all over again.
Reformatting won't do you any good, you'll notice the exact same behavior. The reason you didn't have a lot of impact using AirTags with your XS Max is because the U1 chip isn't in any of the iPhones before the 11 series. That's also the reason you wouldn't have been able to use precision finding feature on your XS series.
It is the constant pinging of the phone to the AirTag through the U1 chip that causes the background activity of the find my app and consequently the constant background battery drain. This is expected behavior, and it will happen regardless of what you do. I don't think Apple will ever change it.
On an unrelated note, I also noticed that the notify when left behind feature doesn't work if you have location based alerts disabled (Which in itself constantly uses location, with or without AirTags), so there's another feature I won't be able to use without it taking a hit to my battery.
Being a customer of over 10 years, I can tell you Apple's quality of hardware and software has really gone down the pipe over the course of the last 2 years. Half their products don't work as they're supposed to and just cause unnecessary frustration which shouldn't honestly happen when you pay such a premium for their products. All they're concerned with now is earning more money.