I'm not quite sure how it work either, but mine is faulty. I was having the weirdest thing happening. When I started out in the morning and turned on the heat it would work fine then start blowing cool air from the vents once it reached selected cabin temp. The flap would stay closed and the fan speed wouldn't change. When I rolled the windows down to let some cold air in the vents would start blowing warm air again. It seemed as though the CC wasn't reading the outside temperature. I unplugged B10/5 and it started working perfectly.

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1995 E420 152k
1991 300D 2.5 348116 daily driver
1992 300E 2.6 196k-work in progress(head gasket)
2002 BMW 745Li 93k