Interesting post e.g. reverse engineering!

What I write here is pure therory and don't quote me on it.
Also, I have little to no experience with this engine type.

If I had my fingers in the design, I would use a hall effect sensor. sort of a transistor that I can switch on and off with a magnet.
(Mercedes is using this technology on the wheel speed sensor, although it is somewhat easier on the wheels because we don't care in what position the wheel is. All we want to know is, if the wheel is still moving for ABS purpose.)
This type would require some voltage to be applied.
The induction sensor is probably not the way to do it, since there are other sources of interference that could lead to misreadings. Also, an inductor has the disadvantage to generate a negative pulse and Voltage and Current are out of phase for a brief moment every time it gets triggered, causing unwanted harmonics (Interference). It can be knocked down, but in a vehicle, we don't want to overdo it, if there is a better solution.

The cam shaft has probably teeth or magnets (magnetized theeth number depends on how accurate it needs to be) at the end with one of them being slighty larger than the rest of it.
This would allow for a start position sense and then in conjuction with a fixed number of pulses, the exact position of the shaft could be determined by counting the teeth from the start pulse.
I can imagine that there are at least two cam shafts, left (6) and right (6) cylinder, I suppose.
The design is probably the same if there are two or more cams.

With a two wire design, the actual wire could be the supply and signal wire at the same time.
Physically, I can see a coaxial connector, center signal/supply and the outer is possibly a shield attached to chassis or computer ground.
The device that receives the signal is probably "low active" meaning there is a supply voltage as soon as the ignition switch is on. As the cam turns the teeths on it will pull the hall receiver to ground, meaning it is active. if a non magnetic part matches the Hall sensor, the voltage will rise to whatever supply it is, and so on. The slightly longer active time (low) will determine the start position of the cam. Now there is most certainly more involved, but I think that is the pricipal of the beast.

I don't believe that one can interchange cam position sensors that aren't designed for this engine!
The distance between the magnet and the Hall is important.
Anything is possible, but at what cost?

__________________
Mostly, I don't know notin, I just know where to look.
I am looking back, to over 30 years in Electronics Design.
Electrons don't care if they move in a car, computer or relay!

95 W124 E320 M104.992 - Because, I love to repair, naaaah!
Over 221,000 Miles
Cheers,
Norbert