Brian has it exactly right.
The place were the equalizing piston lives is in the bottom of the automatic brake valve housing in "Chamber D."
To further expand on the "why" of the equalizing piston - if the engineer were to reduce the brake pipe pressure by only watching the brake pipe air gauge he would be far beyond where he wanted to go due to the volume of air that would have to exhaust through the brake valve before reaching the desired place.
When one makes a "reduction" it is important to pay attention to the length of "blow" or air exhausting from the brake pipe. If you have many cars and the blow is short, something is wrong, like an angle cock being closed on the tender or one or two cars back. It is one of the thing you listen for when doing a brake test.