I don't know if that magnetic field affecting the dogs is true but I agree that dogs would encircle a prospected location before they do their thing. We actually induce that circling when we are teaching our dogs toilet manners. We would lay an old newspaper on the floor and place the puppy there. And to train, we would hold the neck to guide it in making a circle on the newspaper. Within a week, the puppy would be doing its thing on the newspaper and later on we would be laying the newspaper outside the house.
I forgot that sniffing, yes, they sniff the ground before making that circling move.