I carry two Android devices: my Nexus S phone, and a Nexus 7 tablet (both running Android 4.1 "Jellybean"). The tablet has Wi-Fi, but no cellular radio; so in order to use the Internet with it when there's no Wi-Fi hotspot nearby, I have the phone set up for Wi-Fi tethering: it effectively becomes a Wi-Fi hotspot, and the tablet uses that for Internet access. This works perfectly.
However, I recently discovered what appears to be an alternate method of tethering: Bluetooth. Both devices have menu options that seem to allow it; here's screenshots of how I configured both devices:
I tested this by turning Wi-Fi off on both devices, then opening the browser on the tablet and refreshing the page that happened to be loaded. I saw a message that said
Unable to connect to the Internet
I was, of course, hoping to see the page reload.
It's a shame that I cannot get this to work, because it promises one advantage over Wi-Fi tethering: easier security. I want to prevent other people from stealing my bandwidth; with Wi-Fi, this requires that I set up a WPA password, and then get that password onto the tablet somehow (which is quite tedious). But with Bluetooth, all that's required is that I "pair" the devices, which I've already done.
So I am wondering if I'm doing something wrong, or if this feature simply doesn't work.