The use of sub-Terahertz (sub-THz) band is gaining considerable attention in 6G networks. In this study, we introduce hardware and propagation integrated 3D Propagation Model to describe sub-THz channels and discuss its advantages over both deterministic and stochastic 6G channel models. The unexplored mutuality of localization and communication is presented and its potential in integrated sensing and communication (ISAC) applications is highlighted. Afterward, a real-time sub-THz localization experiment is conducted to show the impact of the mispositioned and misaligned narrow beams on service quality. In continuation, we highlight the most current challenges and developments in THz localization and explore the potential of sub-THz frequencies to efficiently utilize the ultra-wideband spectrum. In the end, the open issues that need to be overcome to provide high spatial resolution and millidegree-level angle of arrival estimation in ISAC applications have been explored.