Rust builds up under the sensor and pushes it out away from the reluctor ring in the hub. It's too far away to properly sense wheel speed, so when you get down below 5MPH, it thinks the wheel is sliding, and kicks in your ABS system.
If you have a 2500 or 3500 SRW it's an easy fix. Just pull the brake caliper and rotor off, pull the sensor out, file the surface where it sits flat and shiny, and put it all back together. The 3500 dually is a pain in the rear due to the wheel spacers. 32 lug nuts just to get to the brake calipers.
I've been driving my 2002 Chevy 3500 dually with the ABS fuse pulled for years. I think it needs new front unit bearings anyway so I haven't bothered.
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