I thought the same thing so I bypassed the BOB and fed the signal straight into the parallel port and got the same results.
Just to clarify, on the diagnostic screen the index light should blink on and off as the singal is pulsed, do I have push the spindle button for it blink?
At the moment my index light never blinks, if I toggle the active high/low on the input screen it will turn on or off but never blinks when I turn the spindle.