It took me a while to find it on iOS, it’s under the contacts tab called “find people near by”. It doesn’t seem to work without location enabled so hopefully that would keep you safe.
To be fair, it doesn't ask for permissions until you click on it, and (on iOS at least) the permission isn't automatically granted. This all looks above board IMHO
People do that so they do not have to type by hand all their friends using the app. Granted, most people probably don’t have a lot of friends using Telegram... but that’s not what Telegram is hoping.