I also agree with you both that location data is definitely personal data that should be protected. However, Colota stores data only on your own device and it's never sent anywhere unless you configure a server and that server is out of Colota's reach. End-To-End-Encryption doesn't apply here since Colota is just one endpoint sending to the user's own server. There's no third party to encrypt against.
Colota is also meant to be an app which supports several "Google Timeline" alternatives like Dawarich, Reitti, Geopulse, etc. All these backends would have to support the same decryption which Colota offers, which is not realistic. You can also specify that data is only sent via an active VPN connection or just use it offline and use the built in file export as e.g. geojson.
Also Colota is a free and open source project. You can review the full source code to verify how your data is handled.
Probably phrased that wrong. There is no backup server. Users can create and add one if they like.
Colota offers out of the box file export (csv,geojson, gpx and kml) and supports hive_partitioning via variables in the endpoint (https://colota.app/docs/configuration/server-settings#url-variables).
Colota already uses WiFi for home detection (WiFi pause in geofence zones) and Android Auto/car mode for vehicle profiles.
GPS is only turned off by being connected to a WiFi or being motionless (or both) while being in a geozone. When wifi disconnects or/and motion is recognized the GPS starts again.
Bluetooth detection is the one thing that doesn't exist. It could be a useful addition. I will note that. Thank you for the feedback!