Hi Daniel, I hope you're doing well!
The proximity reporter SDK example implements the Link Loss and Immediate Alert services, described by the BLE SIG in this page.
They contain 3 alert levels, which can trigger different events depending on the severity of the alert. In the case of the SDK example, the alert level controls the different color of the RGB LED, with the no-alert status setting the LED off, and the other severity levels each configuring a different shade of blue.
The value of the characteristic can be changed, depending on the configuration done by the user.
The RSSI value is calculated on the phone's end, as it stands for Received Signal Strength Indicator, which is taken from the packets transmitted from the KW41 and received on the phone.
I'm currently performing some tests relating to this SDK example and the Link Loss service, and will provide more information about how it's implemented as soon I am able to.
Please let me know if you need any more information.
Best regards,
Sebastian