The red and black wire (with the fuse) are connected directly to the car battery + & - .
The red wire output goes to positive pole of the LED daytime running lights, the black wire output goes to the negative pole of the daytime running lights.
The yellow wire is connect to the headlights (or dashboard lights), when headlights or dashboard lights are turned on, the brightness of the LED daytime running lights will be halved.
Throw it in the bin and buy a changeover relay. More reliable and easier to wire up. Search on drl mk3 for more info. You will need a couple of piggy back fuse adaptor leads to give you power and the switch for headlamp on/ off.
No, the feed from the headlights operates the relay and turns the DRLs off when the headlamps are on which is the legal requirement. DRL’s are on as soon as the ignition is on.