Device Activity Check uses the “Last Activity At” from the Device Details page:
This only updates whenever the device generates an event, so it works well for devices that check in regularly. All of my motion sensors and contact sensors also report temperature, so they are always checking in, even when there’s no one in the house.
You can also set up different intervals for different devices. I have most of my devices checked every day, but I have my presence devices checked every 3 days (sometimes my wife won’t leave the house during the weekend, thanks to COVID).
However, like you mentioned, it doesn’t work well for my button device, because that one only generates an event when a button is pressed.