Looks to me like its an ambient light sensor. You can see an opaque dot in the top left corner of front view photos.
I thought it might have part of the circuit in Step 7 but now I wonder if its attached to the screen circuitry. Nonetheless I have calculated the magnetic sensor to be in the bottom left corner, if you are facing the screen in portrait. I am not sure if it is supposed to work by default but for it to work for me I had to install Magnet Screen Lock app. Handily the app will also tell you the strength of the magnetic field detected by the sensor.