I did a little playing around with a couple of CPS I have. From what I can tell the sensor is open when it sees metal. It closes when it hits the air gap in the balencer.
I know one of the sensors I have is bad. The other one is a question mark. The two I have did not transfer a full 8 volts back to the PCM. One only sent a 1 volt signal. The other was only around .05 volts. That is the known bad one. I made a jumper setup to test the one on my truck. I didn't have time to see what it is putting out.
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93 W350 w/duals, fuel pin turned, 6X.018" injectors, 4" exhaust, 3" air intake horn, Super HX40/16, auto, 3:07's axles, 2" skyjacker lift, B&W flatbed