Single wall carbon nanotubes (SWCNT) fluoresce in the near infrared (NIR) and have been assembled with biopolymers such as DNA to form highly sensitive molecular sensors. They change their fluorescence when they interact with analytes. Despite the progress in engineering of these sensors the underlying mechanisms are still not understood. Here, we identify processes and rate constants that explain the photophysical signal transduction by exploiting sp3 quantum defects in the sp2 carbon lattice of SWCNTs. As a model system we use ssDNA coated (6,5)-SWCNTs, which increase their NIR emission (E11, 990 nm) up to + 250 % in response to the important neurotransmitter dopamine. In contrast, SWCNTs coated with DNA but with a low number of NO2-Aryl sp3 quantum defects decrease both their E11 (-35%) and defect related E11* emission (- 50%) at 1130 nm. Consequently, the interaction with the analyte does not change the radiative exciton decay pathway alone. Furthermore, the fluorescence response of pristine SWCNTs increases with SWCNT length, suggesting that exciton diffusion is affected. The quantum yield of pristine (6,5)-SWCNTs increases in response to the analyte from 0.6 % to 1.3 % and points to a change in non-radiative rate constants. These experimental results are explained by a Monte Carlo simulation of exciton diffusion, which supports a change of two non-radiative decay pathways together with an increase of exciton diffusion (3 rate constant model). In summary, we demonstrate how perturbation of a system with quantum defects reveals the photophysical mechanism and provides opportunities for novel sensing concepts.