There’s a small light sensor in each AirPod that detects whether there is a light source or not. Light detected by sensor = Not in ear.
This is coupled with the gyroscope inside that detects whether the AirPod is in a vertical position (i.e. likely in the ear)
You can test this out by holding your fingers over an airpod and adjusting its rotation to see when the music continues on the other ear.
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