Thank you for the helpful info @gabe.mi, please correct/confirm my new understanding…
The BTT Smart Motion Sensor can only detect motion, the sensor is not able to detect whether filament is present or not.
So, Klipper infers whether filament has run out when the extruder is pulling filament through, but no motion is detected by the sensor for some number of millimeters. This is why, when no active printing job is running (i.e no extruder movement), the dashboard can only detect motion has occurred since reboot, but has no idea if filament is present or not.
Started asking these questions because I’m trying to verify sensor is configured and behaving correctly before printing on my V1 Engineering MP3DP v4 build. Ironically, looks like I need to print something to verify the motion based runout sensor config/hardware is working 
Update: Did tear down, device can only detect filament motion, not presence, shame…