When the sensor is set to day mode (or whatever you want to call it) it accepts light from all angles.
But when set to night mode, it only registers light from above; meaning that all it takes is one block above it to turn it on.

Left is a sensor set to day being on, with only 1/4 of a block missing to shine light on it.
Right is a sensor set to night, being on, with only a block above it (and a lantern to represent it's inability).