How do resistive type fuel level sensors work?
The datasheet says:


  These rugged transmitters are designed for tanks up to 18 feet (549 cm) in depth.
  Heavy duty stems resist turbulence, and float options accommodate liquids with
  minimum specific gravity as low as 0.53. Standard resolution is 1/2 inch; higher
  resolutions are available on request. [Emphasis mine.]








simulate this circuit &ndash; Schematic created using CircuitLab

Figure 1. The innards.

The clue is in the 1/2" resolution that the sensor is using reed switches spaced at 1/2" intervals. The magnetic float is big enough to ensure that at lease one switch will be on at any position and it can be expected that there will be overlap in transitioning from one switch to the next.


  When the float is at the very bottom the output of the sensor is Vmin (possibly ~0 V) and as the float progressively approaches the top the output increases up to Vmax (possibly ~Vsupp).


The sensors come in a variety of options including 4 - 20 mA and 0 - 5 V output, for example. This means that there is a conditioning circuit in the head which converts the resistance scale to the required output.