So scaling down the wheel to fit inside the distributor may not work because it will change the size of the teeth and thus the signals to the ECU? I was wondering about that.
I don't think so. My analog is computer hard drives, which we used to cylinder, sector, and track, into theoretical Russian doll arrangement of 'cylinders' nested one inside the other. The cross section of the cylinders was then divided into pie shapes and the wedges further processed to make a low-level format.
Why did I tell you that? Because we're looking at what I think is the same physics here. A disk has 360º. At a given (1) RPM the disk is passing all 360º under the sensor in one minute. It's doing 180º in 30sec, 90 in 15sec, etc. AND IT DOES THAT ON EVERY PART OF THE DISK. So if the disk has a diameter of 2 inches, the outside edge of the disk does it at the same time the corresponding point of the disk at 1 inch does it.
But the circumference of the disk at 2" is 6.28". At one inch it's 3.14". So to make the full 360º sweep, the outside edge of the disk needs to cover more distance in the same amount of time as the center. To do that it needs to travel faster.
So the sensor picks up the same number of degrees of sweep in the same time for any point of the disk, and it takes the same time for the same degree sweep to occur at any point of the disk. And from that I figure the diameter of the disk circle makes no difference, except to the sensitivity of the sensor.
Now this might be entirely bad logic -- I don't know. It just seems logical to me.