It's a fuel cut, I think it should kill your engine. If the rpm transducer is functioning properly, then it will cut the 12v signal once RPM has dropped below a certain point. Warren has posted a bunch of stuff on the RPM transducer, as well as others who have posted how to fix them. Apparently the components inside corrode and break under vibration. It's a relatively simple circuit, and shouldn't be too hard to restore - or you can spring for a new one, cost in the low $200's
Brad