There's an RPM-related sine wave voltage developed by the reluctor that serves to turn the module on and off when it's applied to the integrated circuit. On the GM system, there's as many high spots on the rotating shaft as there are cylinders, ditto for the pickup coil. Each time they align, they generate the positive part of the sine wave. As RPM increases, the amplitude of the voltage gets high enough that the signal tries to turn the power transistor on before the induction in the primary winding dissipates from the previous spark. That creates a momentary impasse that effectively shuts the ignition down, or causes a stutter in the performance known as "spark scatter". In plain terms, the engine quits accelerating somewhere between 5,500 RPM and 6,000 and starts missing and backfiring. If every other point of the rotating magnet is ground off, the remaining ones still align every time a spark is needed, but the amplitude of the induced voltage is cut in half. This allows for at least 1,000 extra RPM, sometimes more, without the stutter coming in. That's enough to win races, when the competition is limited to stock, unmodified components. (It's only cheating if you get caught!)
Jerry