Does Bluetooth have to be enabled all of the time on iPhone ?

If Bluetooth is not on certain functions will not work, specifically, connection to an Apple watch, connection to medical devices, AirDrop, AirPlay, and the Find My Network, the feature that uses the crowd-sourced network of other iPhone users to pinpoint the location of a lost phone that does not have an internet connection.

As it uses virtually no power unless actively paired and connected there is little reason to ever turn it off.

It's generally a good idea to leave both BT and WiFi on:

Wi-Fi and Bluetooth Battery Drain and oth… - Apple Community

But, in the end, it's up to you.

Not necessarily. If it were mandatory, you would not be offered a switch.

But of course you will lose plenty of connectivity functionality should you choose to turn it off.