To elaborate....when the sensor is touching the ring there is a uniform wave pulse when checked on an oscilloscope. If there is a gap, the wave can be erratic.
If there is a wobble and the sensor is displaced, which it does, the thing is to eliminate the wobble and ensure that the ring runs true again.
If the sensor is inserted until it contacts the ring, any very slight run out will push the sensor up the bush, it will not "Grind" the sensor away.
Some cars allow for height setting of the sensors by fitting shims to give clearance which can be measured. On the P38 there is no way of getting in to measure any clearance, that is why they are pushed in to contact. The sensor itself is away from the metal casing that encloses it.