It's really simple, Ronnie. You're right, it's a function of a stock ECU with a lambda sensor. Most aftermarket ECUs do this as well. Closed Loop is when the ECU adjusts fuelling in a feedback loop: too much unburnt oxygen in the exhaust -- increase fuel, too little -- decrease fuel. This way the engine operates very close to the ideal stoichiometric air/fuel ratio by constantly oscillating around it.
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