Yes, the batteries are a standard "coin" battery, CR2032, I think.
As for the alarm, I really don't understand the question. The alarm beeps when the tag has stayed near a given iPhone for a long time and the owner of the iPhone isn't the owner of the tag. It's to warn the iPhone owner that they MAY be being stalked by the Tag. The downside to that alarm is that if, in your scenario, someone stole the bag and kept it with them for long enough, the tag would start to make the alarm sound if they had an iPhone.
I have tag hangers on my luggage, sturdy wire ones that hold the tags firmly locked in place. The idea is to discourage a thief by displaying the tag, while enabling the broadest range by having the tags outside the bag, not inside. Worked well on two international trips I have made in the past six months. My reason for having the tags is not so much about theft as it is about lost luggage. Having lost a bag before AirTags came along, it would be very useful to be able to tell the employee at lost luggage that the last time the bag was seen was x minutes ago at <<this>> location. It also gives me some confidence when waiting for the baggage carousel to start that my bags are actually somewhere in my arrival airport, not left behind in the departure airport. I was even able to see that the bags were near the airplane before they closed the doors and asked for electronics to be shut down. Comforting on long journeys.
So, while I would like the alarm not to go off to alert any thief that I know where they are, that ability is overridden by the need for a potential victim of stalking to know they are being followed by a tag.