Well, a Fitbit operates the same way your phone does. GPS not on all the time. The battery is much smaller than it is on your phone.
However, Google doesn't need your precise location 24/7. Polling GPS once every 5-10 minutes is more than enough to advertise things in your area or know every place you go throughout your day.
Google isn't just trying to track you for advertising. They also put a lot of effort into creating their maps, and GPS tracks are very useful for that.
A lot of people use Fitbits for workout tracking, so they must have a lot of GPS tracks that could be useful for mapping areas that are currently not so detailed on Google Maps (eg. many hiking trails are missing on Google Maps in my area)
So even if Google tracks you all day, they mostly have coarse data.
Fitbits main purpose is workout tracking, so they have a lot of precise GPS tracks. I suppose those have some value for Google.