It is magnetic but quite eqasy to wipe over the magnets. I keep it well above the spindle on the guarding and have no issues with swarf so far. Perhaps because I don't machine too many ferrous jobs on the machine.
On the Bridgeport I use a similar type which clicks onto the spindle nose without magnets, this can be done as there are no drive dogs in the way.
Both are extremely rigid with no needle flutter when rotating the bezel with the bonus of a low working height.
The feature that encouraged me to design the system is that I wanted to keep the dti stylus movement directly towards the spindle centreline and also perpendicular to the bed. This allows the stylus to enter small bores easily without having to set the dti square which can be a pain on other holders. This was achieved by replacing the round dti spigot with a hexagon to keep it aligned at all times.