Two wire GM alternator to ignition switch?

The #2 sense wire out of a normal 3 wire GM 10/12SI alternator is usually connected along with the main output wire, sometimes to a lug on the starter, horn relay etc, and is the main power distribution point. The sense wire "tells" the alternator to produce 14.4 volts at that point.
A one wire conversion produces 14.4 at the rear of the alternator only, and cannot boost or alter voltage output down stream because of wire lengths and voltage drops.

 

Exactly...the Alt may produce 15v or more output to get the 14.4v at the distribution point.

With the loop conversion or a 1 wire Alt, the distribution point will have to make due with whatever gets there from the Alt after resistance etc is taken into account...because the Alt is only gonna make 14.4v at the output and thats it.
At the distribution point you might only get 13v or whatever so performance of some systems may be less than optimum.