You can test your rain sensor directly. Use a multimeter to measure the conductivity (or resistance) on the two wires of the sensor. A ‘normally closed’ sensor would measure 0 ohm when there is no rain, and measure infinite ohm if rain activates the sensor; a ‘normally open’ sensor is the reverse.
‘Use weather adjustment’ has nothing to do with rain sensor — that is to select whether you want the ‘watering percentage’ to apply to the program. Rain sensor does not affect how watering percentage is calculated.