Light from the oscilloscope screen hits a photodiode, producing an electrical signal which is amplified and fed into the oscilloscope input. Modulation results from the the beam moving off the screen, passing under the black graticule (grid), or being obstructed by objects in front of the screen.
The Boldport Club kits keep on giving. This one has some nice functionality in how it turns light fluctuation of audible frequencies into sound. Lots of possibilities to have fun with this. It could be a feedback element to a synth, a part of an art installation, a data gathering tool. So much fun!