My understanding is that it mainly tells us whether or not we are administering enough tests, it's not a direct measure of spread due to the factors you mentio

My understanding is that it mainly tells us whether or not we are administering enough tests, it's not a direct measure of spread due to the factors you mentioned. In California's case we've had high sustained levels of testing so we can also infer that were reducing spread as the positive test rates drop but that doesn't seem as strong of a signal as other metrics.