I was taught this too growing up in rural america. Did it myself at some land my grandparents had.

Best explanation I’ve heard for why it “works” is that when looking for places to first install pipes the location tends to be obvious or intuitive, so then years later when someone needs to find it again we naturally trend to the same rough area, pull out those stupid rod things and when they randomly cross there’s a pipe there cause we’re already standing in the general right spot. Get a high enough success rate and our brains start to think there is causation to the correlation.