The ABS sensor magnetic tip sits close to the spinning tone ring. As the metal teeth of the ring pass the magnet, they change its magnetic field. The sensor translates this change into an electrical signal for the ABS computer. This allows the computer to know how fast the wheel is turning.
Because the tip is magnetic, it attracts metal dust from wear on the brake rotors. This buildup blocks the magnetic field, distorting the speed signal. Cleaning the magnetic tip with a cloth can fix speed sensor errors.