I suppose the distance from the axle recommendation could be to not to mount the magnet and pickup too far out toward the rim. Obviously the "count" remains unchanged (once per revolution) but the linear speed the magnet passes the pickup goes up as you move it outward. At some point the magnetic pulse may go by too quickly for the pickup to notice it. I've heard various reports on this. Some cyclometers have no problem with mounting the magnet/pickup way outboard and some do.