<<<Does anyone really know what and how this thing works?>>>
A small magnet is attached to the "wheel" inside the Flow Meter.
Each revolution of the "wheel" (Hall Effect Sensing) is a signal---which is sent to the Main Board.
In this manner---the Main Board can "count" the number of revolutions---for correct water fill.
If too little or too much water enters the appliance (within a specified/allowed time period) an error message is usually displayed---indicating that a problem/malfunction has occurred.