It works but is more limiting than I expected.
The tag has to be hard up against the back of the phone for it to trigger. No good having it somewhere in your car or bag, you must put the phone down on the tag or hold it against it.
The phone has to be unlocked, so on my Xperia Z that means press the power button, slide your finger across the screen and only then lay it on the tag. That's a lot of effort.
It does understand a sort of flip-flop logic so for each tag you can program 'on' and 'off' transitions. Every time you make contact it flips to the other state. So you don't need to use one tag for the house and another for the car, you can swipe as you get into the car to turn on 'car mode' and swipe as you get out to turn it off.
So it does work as advertised.
But my phone I notice uses the same 'Smart Connect' app to make state changes when it e.g. detects the bluetooth in the car. In fact I see Smart Connect has these 'devices' listed - charger, bluetooth (each of 3 separate cars), the 4 smart tags, connecting an MHL device (TV), another phone (bluetooth), headphones, headset, a Panasonic TV. The bluetooth is longer range so I can easily tell it to start 'car mode' as soon as it connects to my car's handsfree.
So these tags are really for places where there is no device to connect to...the garden. soaking in the bath maybe?