How do aftermarket motorcycle rev-limiters work?

Im doing meintenence on a new to me suzuki gs500, the previous owner has installed a rev limiter/ 2 step box, from what i can tell it is conected between the signal generator and the ignition coil. So my theory is that it is sensing the timing and rpm of the motorcycle from the pulses coming from the signal generator and stops them from going to the ignition coils when exceding max rpm, could this be correct? What component would be used to achive the switching a power mosfet? Would the coils generate returning voltage spikes that need to be dealt with, a diode?