It's an integral part of the ignition unit. One way it might work amounts to a counter that increments when the signal from the crank position sensor comes in. There is a timer that periodically trensfers the count to a register and resets the counter. The contents of the register is then compared to a magic number in the read only memory and, if it's equal or greater than the magic number, the next spark pulse is skipped.
The other way they might be using is to measure the time it takes to get some number of pulses from the sensor. With this, the computer clock is run into a counter and the ignition pulses into another. When you get the right number of pulses, the content of the clock counter is tested and, if it is less than the magic number the next spark is skipped. Because of the offset in the crank, I would think they would have to count at least 3 timing pulses to make this work. From the sound of the engine when you hit the limit, I think this is the system they are using. The other method usually runs so long between being cut off, it can damage the engine anyway. Did you see that video of he fool that ran over himself doing a burnout with a BMW cage? Sounded more like water in the gas than a proper rev limiter.
