I am not sure what might be wrong with it but it should work at 15 or 20 feet.  Have you tried changing the orientation of the computer to see if reception improves using a different direction or height? Wi-Fi can also disrupt a Bluetooth signal if you happen to be in a busy area.  You might take the system somewhere quiet for testing. Do you have anything else you could test like a Bluetooth headset? There are updates put out for both the Bluetooth and Wi-Fi separately.  Just make sure they are both updated.
I have a Dell XPS 15 9500 but I recently started using it in clamshell mode in a vertical stand along with a bluetooth keyboard and mouse.  The issue is bluetooth reception is horrible.  I have to have the keyboard about 3 feet away from it, same with both mice I have tried using with it.  I'd prefer to have them at least 5 feet away and even at 3 feet here and there the mouse gets jerky or the keyboard stops typing which I believe is from poor reception. I'm not sure why I have this issue but I'm assuming it's due to weak bluetooth on this laptop.  I have a MacBook Pro and can easily use the keyboard and mouse 3-4 times further away.   I have done some reading to see others complaining about the poor Bluetooth reception so is this a known issue with the Dell XPS 15 9500?  If so is there any way this can be fixed such as a driver update or some other change?   One option I'm considering is simply buying a bluetooth dongle to plug into a USB port.   Yet I'm relatively new to Windows 11 and am not sure how this would work.  Would it be possible then to turn off the internal bluetooth and only use the Bluetooth USB dongle?  I would hope this solves my reception issues but would need to know I'm using the external USB dongle and don't want the computer to be using two bluetooth adapters and get confused.  When I'm on trips at times I use my bluetooth devices and use them within close range so I'd likely then want to start using the internal Bluetooth again.
Dell XPS15-9500 Issue with Bluetooth-USB Bluetooth Adapter?