Sensing failure is when the pacemaker does not adequately interpret the native electrical activity. This is also commonly divided into 2: oversensing and undersensing.
Oversensing occurs when the pacemaker senses other activity and interprets it as native cardiac activity. Because of oversensing, the pacemaker does not fire when it should. Most commonly, the activity pacemakers detect with oversensing are large P waves, large T waves, or skeletal muscle activity. Because of this, the EKG will display an inappropriate lack of pacemaker activity. If this is from skeletal muscle activity, the patient may be able to reproduce this (ie patient moves their arm and pacemaker oversenses with pectoralis muscle activity). Oversensing is a common cause of failure to pace and, therefore, will often show the EKG that was the original indication for the pacemaker (ie 3* AV block).
Undersensing is when the pacemaker does not sense the appropriate native electrical activity and inappropriately fires. This will often produce EKG findings that are seen with asynchronous mode (ie magnet placement), where the pacemaker spikes occur throughout EKG without any relation to underlying electrical activity (except they will follow P waves with atrial-sensed, ventricular pacing). Undersensing most commonly occurs when there is fibrous tissue around the lead.
Examples:
Source: My ECG
Undersensing. The first 2 beats show a normal V-paced rhythm. The next 2 beats show adequate native activity, but pacemaker spikes are seen within the QRS complex and T wave as the pacemaker inappropriately does not recognize this activity. Note that the spike-spike intervals are consistent.
Source: UCSF Internal Medicine
This again shows undersensing with pacemaker spikes throughout the EKG despite adequate native electrical activity.