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Ahhh. Thanks. I only noticed it when copying the directory via samba to windows and it flagged the second copy as trying to overwrite the first. I believe windows files are case insensitive.
The +5V in your schematic is not being produced by the circuit. It is assumed to come from an external power supply. The circuit just allows the two to interface so that the RPI can control the external +5V with a 3.3V output to turn on the relay.
If you leave it as an output, you will read the state that you are driving from the PI. Once you turn off the driver by setting it as an input, the sensor can then drive the pin and you can read your data. Use the abyz.me.uk/rpi/pigpio/python.html#set_mode to set the pin direction.
I once accidentally fried a regulator on a HAT board designed to power the PI through the connector by plugging on the USB power instead of the HAT power. Did you initially try the board WITHOUT the usb power connected and only the POE connected? Do you have any other POE devices to verify that your injector is working?
If you are using USB peripherals that have significant current requirements, you might need to use one with higher current. I have used the linked part with a PI 3 with minimal (~200ma) USB power draw. Don't forget the 267 ohm resistor to set the output voltage.