Hi Bert,
I could have sworn that I replied to your last post last week.
I fact, I was anxiously awaiting your response and was checking 2 or three times a day, but never got one.
Then on Friday, I checked this forum again, and my reply was not there. (Maybe it was never there, but I would have sworn that I did see it)
Anyway, since there was no response, I figured you lost interest.
My respose to your last post July 26 was the following (as best as I can remember):

We have put the contraption on a scope and can cleanly see that the pulse finishes before the next one starts. The voltage on all pins is 5 volts and drops to zero when the magnet passes the sensor.
And besides, I am turning the wheel very, very slowly, to watch what I get in the interrupt registers.
I believe that I do need all three signals to tell which direction the wheel is turning. With only A & B, the sequence of signal would always be A-B-A-B-A-B, now matter which direction the wheel is traveling.
With three signals A,B, & R, The sequence would be A-B-R-A-B-R-A-B-R going in one direction, but A-R-B-A-R-B-A-R-B in the reverse direction.

We have an older version of this same contraption, that seems to work perfectly. However, I can't get my hands on the source code to see how it was done. That model was before my time, years ago.

regards
Tom