According to Patently Apple, the Pencil can act as a mouse when lying in its retainer within the computer. There’s also a high-end lighting system built into said retainer where the Apple Pencil will replace the F-Key row. With this, the functional keys will appear illuminated on the Pencil. The patent shows a MacBook with an input tool (an Apple Pencil or similar device) that has a sensor just above the keyboard.