Honest answer - I don't know. Bannerlord does some things differently than Warband and I haven't really had tracking high enough for it to be of constant use enough to figure it out.
I would use them to track parties like you had guessed. As it is now, I do spend a bit of time just wandering around chokepoints looking for lords. It would also help to track armies as they move. Say if you had started an army to try and wanted to stop the enemy from rampaging, with a limited amount of time your army can be formed, tracking could be useful...