how does the trace work

haven’t read the books in some time, but I was thinking and as far as I remember it’s location based, right? like harry was blamed for dobby’s magic because he was the only wizard in his neighborhood.

but what about kids in wizarding families? can’t they ignore the trace entirely because they’re surrounded by family members who can legally use magic? the ministry wouldn’t be able to know it was the underage person using it

if so that means the only people who don’t use magic outside hogwarts are muggleborns (and harry), so all the students from wizarding families ignore it. doesn’t that make the trace fairly useless, then?

and how is it even applied? is it from birth? what about muggle-borns?