It's something like a camera, isn't it? This reminds me of a project i was involved about 30 years ago, about reading the level of blood probes. There was a robot to handle the tubes and it could pass the tube through a ring with 5 LEDs and 5 photo diodes to find out the level of the liquid inside. Nowadays one would do it with a video camera and a smart AI system. How times have changed.
Regards, Dieter
Edit: Just found the first prototype. Actually it had 12 LEDs and 12 photo diodes, with modulation and demodulation. The black ring is an optical mask with 24 1mm holes and served to sharpen the image. At the time it was used with an 8 bit micro to digitize the data and perform some pattern recognition.