The band has no GPS or "tracking" in it so no, they cannot find a lost child in the park and unless they make a change to the band will be unable to do so ever. A CM with access to a reservation system can however, scan a child's band and access their reservation information (which usually has a phone number) and call the parent to find them. The only way that you can be "tracked" is by when you use the touchpoints. So yes, Disney will know if you entered a park, activated a FP+, purchased something, etc. That being said, they don't care exactly where YOU are. It's all a numbers game, x number used touchpoint A while y number used touchpoint B and so on and so fourth.