I e-mailed my question to someone I think is in the know about such things. Dave Cave of Gas Engine Magazine. This is the answer I received.
I certainly am not a Tecumseh expert but I can maybe pass on some thoughts.
Somehow the electronic ignition module must get timing (actually crankshaft position) information to produce a spark at the proper time. Two common type of sensors that provide this information to the ignition module are Hall sensors and magnetic reluctance sensors.
Hall sensors sense magnetic fields. They will conduct a given amount current when no magnetic field is present and conduct a different current when they are in a magnetic field. Their output is variable depending on the strength of the magnetic field they are sensing. If the Tecumseh pins were magnetic a Hall sensor would see them approaching and send that info to the ignition module.
Reluctance sensors contain their own magnetic field. If that field is disturbed by a piece of moving iron-based metal, they will give an output. The output signal is a function of both the speed and closeness of the moving metal. If the Tecumseh pins were nonmagnetic iron based metal, as they approach, they will disturb the magnetic field of a reluctance sensor and the sensor will give an output to the ignition module.
Since you say that the pins on your Tecumseh are not magnetic, I would guess that the sensor that is giving crankshaft position information to your ignition module is a magnetic reluctance sensor.