Originally Posted by ChipsByAl
The PCM determines what gear you are in from the PSA or the pressure switch assembly. This is in the valve body and only active when the engine is running and the trans pump is working. When fluid is directed to the different pressure switches by the manual valve, the PCM can determine what gear the transmission is in.
The external switch is used for the neutral safety, reverse and PRNDL switches, not used on the F-body. The F-body has a switch at the shift control.
AL