Who exactly is being surveiled here? How is their privacy being affected by this?

This device is not surveilling anyone as far as I can tell. It's logging music that's being played in public in its vicinity. It's not tracking individuals, it's not recording faces.

When someone does something in public, they sort of lose the claim/right to privacy, because they are doing it /in public/. If they wanted privacy they should have done their thing in private.

If you are not willing to grant consent to this thing listening to you, then maybe you should not walk around in public playing your music loudly. Or should everyone who is within earshot of you first get your consent, else they must stick their fingers in their ears?