First, could you post a picture of the mechanism farther away. I know these changers but I'm having trouble picturing exactly where you are showing so close up.
Second, let's be sure of what you are calling the 10" sensor. The one with the little rubber boot on it that pops up from the base plate determines if there is a 7" record on the platter. If it hits a record during the cycle, the mechanism is set tp stop the arm at the start of a 10" record. If it doesn't hit anything. it stops the arm at the start of a 7" record. Right at the end of the cycle, if a 12" record strikes the arrow-shaped sensor over by the tonearm base, the mechanism will be reset to stop the arm at the start of a 12" record.
Also, you say the sensor snags on the locator. By "locator" what part do you mean? The stepped piece that stops the arm at different positions? And, I apologize if you are referring to parts as they are named in documentation. It's been awhile since I have serviced one the these.
What does your changer do during a cycle?
Oops, you said in the title the tonearm is jumping.
Doug