As BIGSESAL says but in simpler terms. If the spoke you put the magnet on is,say, pointing directly to 12'oclock, when it completes one turn of the wheel the magnet will be back to its starting point no matter where you put it on the length of the spoke.
The sensor only counts turns of the wheel, the computer then does the maths as BIGSESAL eloquently describes depending on the wheel size you told it to work with.
With the Cateye Strada wireless I hve found it doesn't matter where on the fork you put the sensor, the computer picks up the signal, but the lining up of the magnet with the sensor is critical.