[HO455]

The light will come on when one of the brake circuits isn't making as much pressure as the other one. So normally when you step on the brakes the front and rear brakes both make approximately the same pressure. Inside of the Proportioning Valve is a spool (Pressure Differential Valve in picture) that will shift away from the side with pressure to the low pressure side if the pressures are not equal.
So if the rear axle hose breaks then then pressure won't build in that circuit. Then the spool inside of the Proportioning Valve shifts and grounds the tan wire and the light lights. Warning you that something is wrong with the brakes.
Note this is not a drawing of a Proportioning Valve normally found on our trucks.