Think of it as a rotating transformer, with the primary windings residing in a stationary casing (stator) and the secondary conductors attached to an inner shaft (rotor).

Tesla's invention is, in essence, a rotating transformer. Its primary windings reside in a stationary steel casing (the stator) and and secondary conductors are attached to an inner shaft (the rotor).

The observer detects the rotor flux components in the two-phase stationary reference frame by the motor electrical equations.