I don't understand it all either, but from what I read, at low rpm's the sensor in the tip of the module pics up that tall pin due to smaller gap. As the rpm's increase, that gap needs to be larger to get a proper signal and voltage to cuase the module to trip and fire.
In my conversion, I just use a magnet inthe advance mode and it trips a small switch inside my trigger to fire coil.
In the mopar's conversion, the Chrysler box is used to control that signal from the snesor and trip coil.
The following is from Ed Stoller's Engines and magnet website. He is describing a little about how his conversion works in relation to the sensor he makes and the pins. He mentions all the factors related to his homemade snesors, which has been taken in to account on over the counter premade ones, like an ABS sensor.
"When the tall trigger pin passes the magnet, a voltage is generated which provides a timing pulse to the Control Module which causes a spark. The magnitude of the voltage and thus the transition form the TDC, starting spark to the advanced spark is determined by, the strength and direction of the magnet, the diode, the dimension of the spool, the number of turns of wire in the coil, the air gap , the RPM and somewhat on the battery voltage. Since the air gap for the short trigger pin is much wider, the critical voltage for spark advance is not reached until a higher RPM."