Yes, you are right. I might have been unclear. The sensor should be placed at the water level you desire. The end of the "freshwater container hose" (I call this now the FW hose) should be high in your sump. Imagine the following if the hose e.g starts under the water level. You just placed the hose in the sump so it contains air. There is no siphon. Gradually the water evaporates, water level goes down (exposing the end of the FW hose or not). At some point the T/O kicks on, water is pumped thru the FW hose, water level raises again, this time covering the end of the FW hose. Well, depending if your FW container is placed lower than the water level (like I have), the FW hose serves now as a siphon the other way around. That's why I recommend to place the end of the FW hose high in the sump (at least above the desired water level). Comprendez? lol! Of course, if the FW container is placed higher than the sump water level you don't have this "problem".
Indeed, the powerhead plugs into the T/O unit, the T/O unit plugs into the wall.
By the way, the way I have it, after the T/O dumped the FW into the sump, it takes the sensor about 3/4 inch of evaporation to kick on again. It is not that it maintains EXACTLY the same water level all the time. It goes down 3/4'..... and up 3/4'.....down 3/4'.....
Cheers!