Actually it only tells the PCM/ECM the camshaft position in relation to the crankshaft. The PCM/ECM utilizes this reading along with other sensor readings to determine spark and fuel control.
That's correct, but by turning the distributor one way or the other you can alter the fuel synch setting. That's another way of saying adjusting the timing of the injector pulse in relation to the cam position. Cams that are ground for higher than stock rpm can benefit from increasing the fuel synch reading up to double the factory fuel synch setting. It's a well documented performance tweek. However as stated earlier, moving the distributor on these set-up does nothing to affect the timing or fuel volume per injector pulse.