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Depending on the signal for something like this it either goes to power or ground (I can't remeber which it is off the top of my head...I think it needs 12v to be considered on by the headunit). If you complete the circuit electrons go excite the pin in the back if the headunit that tells it you are in reverse.
So instead of getting 12v when you go to reverse it does it when you flip a switch. Another 12v source is used and all the switch does is put this 12v to that reverse pin.
(I looked at my thread again and the stupid diagram I hotlinked is missing. It would make explaining this a whole lot easier.)
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