So just got back from the Apple store and as I expected there’s no solution to the problem. There’s no way to actually check if the AirTag itself is faulty. Basically I was incorrectly informed by the tech support person ok the phone that they can diagnose the AirTag at the store.
So my next course of action is to unpair the AirTag and see what happens to my battery life. If after unpairing the Find My app stops sucking the battery overnight then it will categorically point to the AirTag being the problem.
Then I’ll pair it back and see if the issue returns. Depending on the situation at that point I’ll contact Apple again.
The Genius Bar rep mentioned that there’s no known issue on this at present but after seeing my battery usage stats they agreed that there’s definitely some problem. Either with the AirTag itself or the app.