Thank for sketch to help me understand. Hopefully your issue is becoming resolved. I cannot offer anything constructive or useful as I'm just about to start on a bench test distributer myself. Both a magnet wheel style & shutter wheel style just for personal interest. In both cases, heavily leveraging on the work & help of others who graciously shared some details. I have a method to hold the hall effect sensor in what will probably be a plastic part, maybe 3DP. But that has more to do with it being a fiddly little thing to make in metal. I'm not really certain if plastic vs metal is better from electric/magnetic perspective. I did evaluate the V8 distributer dimensions provided by George Britnell in another post, hopefully he doesn't mind me including attached CAD renditions of his 2D PDF & of course he would be the expert to consult on that design. (Assuming I drew it right) this is his shutter window relative to magnet size. And I think I measured about 1.2mm between magnet & hall effect faces. His shutter wheel is very thin. A lot of 'stuff' packaged into that ~26mm OD distributer body to fire 8 cylinders.
Anyway, I didn't want to drift off your troubleshooting topic which is maybe completely unrelated to 'design', especially since you mention it has already been running. Thanks again! PT