It's difficult to see which Laws of Physics would fit that argument! Just in case there is, my logic for saying it doesn't matter is that the speedo sees the signals from the sensors in order to fire the coils and fires them. The coils react and that turns the rotor which the sensors then see and tell the speedo which then fires the coils....
Since it is a closed-loop system (providing you are running sensored, of course) it wouldn't matter how long the wires were, the sensor/speedo feedback loop will react to what is actually happening. If the wires are long and that reaction is slowed, the sensors won't see the rotor move and won't tell the speedo which won't fire the coils...
We probably need an expert to tell us definitively, but this sounds like a million other pub conversations - mostly not allowing the truth to get in the way of a good story! The killer argument for me is that, if it were the case that short wires were slower, none of the cars in the WC used by the top drivers would have short wires - and they all do!!!
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