Odd NPN Circuit behavior
I see 2 possible problems, one of them already pointed out by The Photon. They both have a common theme and that is the base of 'Q' is being overdriven by either the voltage being turned up too high, so the BE voltage of Q is locked at about .7 volts, or the simulated tach signal is overdriving the base, causing the same saturation effect. Try increasing the 10K base resistor to 22K and add a resistor of 2.2K in series with the simulated signal. This way you should get a square wave at the base of Q that is counted properly, and the base of Q is less likely to be saturated ON by either the 12 volt feed or the simulated tach signal. I can see that your using a base pull-up resistor so if the simulated tach input is disconnected the base of Q will not float and be unpredictable or affect the normal tach input.Your 'yellow' resistor should be 1K if possible, as it is driving a voltage divider through a diode, with the output clamped at 5 volts. Maximum current through Q is 12mA at 12 volts or about .144 watts, but some of this is sent to the voltage divider.