There's a trade off with amplitude and ringing management from the shunting along with decreased sensitivity.
With scope measurement that's comparatively easy to work around as the scope will give frequency (RPM) at the trigger level setting where you can set this above the ringing to get a cleaner result.
This is why I suggested you use something at home like a lawnmower or motorbike to get the pickup part roughly optimised before moving forward.
Thanks for the small engine suggestion, but I'm stuck doing all the work at school. I don't have a small engine at home (don't own a motorbike, electric lawnmower), and the oscilloscope belongs to the school anyways. Not really much point in me spending money on my own test equipment when the Uni lets me use whatever I need, as long as it stays at school.
Still getting sorta the same problem as before, with the 120ohm in parallel with the diodes. Diodes are really acting more like capacitors. See:
https://imgur.com/a/l5JEyFor comparison, I replaced the diodes with a 1uF cap in parallel with the 120ohm.
https://imgur.com/a/4ArG0Its definitely attenuating, as compared to 120ohm alone, but the diodes seem to be turning on too slowly to clamp the signal.
Do I just need a much faster diode? I didn't think I would, the signal seems to be on the order of ~50MHz, and 1N4148s should be good well past this.
Would the following be worth trying? (component values are just a guess right now, might be worth trying higher values of R2/R3)
My idea here would be to limit current through the diodes. C1 is probably not necessary, but could be chosen for additional attenuation. I'll try it monday and see.