It's the switch that detects crate hits. There's no switch in the door of the crate to detect that the ball hit it - its detected by the ball rolling over the eddy sensor (if you've played a working SS for any length of time, you've seen hits counted when the ball didn't quite touch the door).
If it's not working, crate hits won't be counted unless the crate is open so the ball can enter it. They're also known for being unreliable, particularly the small molex connector.