What should happen is as follows-
The water level drops below the optic sensor, this kicks on the pump and yellow pump on light is lit on the controller.
The pump runs until the sensor is covered to the point where the cone meets the cylinder, the green and yellow light are on simultaneously for about 10 seconds, it is full, but a 10 second overfill occurs to reduce the frequency of the unit switching off and on. It then shows a green light only.
If this fails the float switch or 10 minute time out shuts the system down.
I suspect that you may have a siphon of water from the reservoir to sump, in general sensors are mounted in the sump but the top off hose should be routed to the tank, if the reservoir water level is higher than the end point of the top off hose, this is what is happening.
The other possibility is that in this foam over condition the skimmer is producing a lot of microbubbles, the sensor only reads air vs water and cannot differentiate between bubbles and being dry. You may need to relocate the skimmer or sensor to prevent this interference.