[amiga386]

I should correct myself here and say it's not potentiometers, but that the mouse has vertical/horizontal wheels that let infrared light through to detectors, and the hardware is counting a quadrature-encoded pair of pulse trains, so it can tell how many steps back/forward each axis has moved.

Nice article about it: https://www.markwrobel.dk/post/amiga-machine-code-letter11/

It also estimates that, if the hardware counters are sampled every vblank, it's accurate (no missed wraparound) for the mouse moving at up to 3km/h! But it's still possible to whip the mouse around faster than that, so action games might like to sample the mouse more often than once per frame.