This is a bit of a "well, duh!" thing. Pretty much every large WiFi deployment has this capability. It is common enough that Cisco has a mainline product family to do it (Cisco Unified Wireless Location-Based Services).
This is commonly used to track carts in hospitals, etc.
You technically don't even have to be "actively tracking" users. You just keep the diagnostic logs of client registrations & signal strength for a while and map it when you care. I'd be more worried about a non-government entity using the data to survey people for blackmail or other gain (e.g. politicians: who is commonly located near the state capital, campaign headquarters, and strip club?)
This is commonly used to track carts in hospitals, etc.
You technically don't even have to be "actively tracking" users. You just keep the diagnostic logs of client registrations & signal strength for a while and map it when you care. I'd be more worried about a non-government entity using the data to survey people for blackmail or other gain (e.g. politicians: who is commonly located near the state capital, campaign headquarters, and strip club?)