OK that clarifies alot.

So what happens when you adjust the sensor to the correct location? I'm assuming the engine runs poorly or not at all(backfire through carb, severe miss etc)

This actually does bring us back to distributor phasing. If you turn the distributor housing the needed 22 or so degrees, the rotor no longer points at a terminal in the cap.

You can try to remap the timing program AND set the sensor in the correct position to verify this. For example put in 30 degrees of retard at idle and rotate the dist housing 30 degrees (advanced) to put the sensor in the right position.
Does the engine run? Poorly probably but it should idle.