Ok, this is a good point. The code encrypting/decrypting the GSM is not open, which means it'll eventually be cracked, and until then we have to just assume nobody else has figured it out. But does this have anything to do with being spied on?

Other than the government decoding your GSM communications (which it can just ask Ma Bell to tap without a warrant and get away with, according to the W.Bush-era abuses) I don't see that particular un-free code helping in tracking or spying on you.