dei prewired starter kill relay function

I am wondering about the DEI, Pre-wired Starter Kill Relay, Part Number 610T.  When +12V is applied between pins 86 (yellow wire, ignition input)  and 85 (orange wire, ground when armed),  the coil becomes a magnet which pulls the lever down making a connection between pins 30 (green 10 gauge wire, coming from key side of starter) and 87 (no wire, no connection). This creates the kill in the starter. 

So the alarm module is sending the +12 volts through the yellow wire in order for this to happen, right?  And does the module also monitor the ignition since the yellow wire is hooked to the car's ignition (the part that branches off the relay)?  Is the only two things that happens? I am just wondering why the yellow is hooked up the way it is and everything that is involved with it as far as functioning with the module. Thanks

I also forgot to ask about this relay - should I put any fuses on it? 

And should I add a diode to it to prevent surge? 

The alarm module doesn't send the 12vdc, the car does.

This is a fail safe design meaning that the NC contacts of the relay are being used.  So, when the relay is NOT energized the car will start.  You can't keep the relay activated at all times as that will drain the battery.  So, to get around this, you hook the yellow wire to the main ignition wire of the car.  You can NOT hotwire the car if the ignition isn't on first.  So, if someone were to try to hotwire your car they would first power up the ignition which would then energize the relay preventing them from being able to start the car.

However, this design assumes many, many things such as the alarm is still active and armed while the vehicle is being hotwires, the thief either won't hear the relay or can't get to the relay once it is energized, and that the relay was installed BEFORE the place where the thief would power the starter.  If the thief can see your alarm or any wiring under the dash then the starter kill is rather worthless!

OK so if I cut the relay off and don't use it then do I still have to hook up the yellow (+ switched ignition input wire), to the ignition wire of car?  Is the only reason for the yellow wire (from the alarm module), in this case (no relay involved), to act as a trigger for the alarm.  Say, if a thief  tries to energize the ignition wire of the car, while the alarm is active? 

If I did not hook the alarm yellow wire up, everything else would be fine right?  I am not going to do this I just want to be sure I know what's going on with it?

The yellow wire does serve as an ignition trigger setting the alarm off if the ignition is turned on.

But, more importantly, it also resets the history of the alarm.  You pretty much MUST hook this wire up or you will always get alarm history info when you disarm and your LED will always blink.