Answer:
It’s not the saw that knows, it’s a seprate part called a SawStop that is installed into the saw housing. The SawStop gives the blade a small electric charge and when your finger (which also has a small electric charge) touches the blade, it completes the circuit and sends a signal to the SawStop to activate. Activation uses a spring loaded mechanism to bring the blade to a stop.
Here’s an explanation and some slo mo footage: https://www.youtube.com/watch?v=SYLAi4jwXcs
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