I'm not sure exactly how it worked either, but it involved a small air line charged to about 45-50 lbs thru the train. In the cab was a round tub about the size of a soft butter continer. In this was a diaphragm and attached to it was an itty bitty whistle. When you pulled the cord in te train, the pressure was reduced, moving the diaphragm, opening a valve which blew the whistle. It replaced the old bell cord and gong system. If you look at a pic of a K36 from the 40's (except 487 which was never set up as a passenger engine) you'll see the extra airhose on the front.
When we re-did the 484 in the mid-80's it still had some of the cab signal stuff (diaphragm pot and whistle.) which got carefully removed and promptly lost somewhere.