If wifi is turned on it will periodically search for new networks. This happens even if you are already connected to one, as it allows the device to connect to a 'better' network, if available.
Scanning/network discovery can be done in two ways. First is passive when a device listens to surrounding access point's (AP) beacon frames. These are basically advertisements for their network. The second method is called active. This is the most likely explanation of how the technology you mentioned works. Active scanning is when the device sends out a probe frame asking for available APs. These are generally ones that you have associated with previously, e.g. Your home network. These probes can be listened to from nearby 802.11 (wifi) devices, therefore tracking you.