you set the maximum assist speed on the LCD - the default setting is 25kph. Hold the + and - button down for a few seconds, the 25kph will flash. Press + or - to adjust if you want to. Press on/off to confirm. The wheel diameter can now be set.
The default setting is 26". Press on/off to move to next if you don't need to change
Hold the on/off (middle) button down for two seconds, you exit the setting menu.
The magnet is tied to a spoke, the speed sensor counts the wheel RPM, multiplied by the wheel diameter, the LCD knows your speed and cuts power when you reach the set maximum speed.
200 rpm on a 26" wheel corresponds roughly to 25kph.
If you turn away your magnet, the speedo does not work, your bike will continue to receive assistance whenever you pedal or use the throttle, you have in effect derestricted your bike.
The maximum speed on a BBS01 is about 22mph on 26" wheels. You get a little more with 700C wheels.