It's not a volume guage. It's a pressure guage. It's measuring the amount of pressure of the co2 gas in the container. There is also liquid co2 in the tank. When you use the some of the gas, some of the liquid evaporates to take it's place. When all the liquid is gone, only then will you see the high pressure guage begin to drop. That means your tank is nearly empty, and you need to refill soon.
The high pressure guage is just as effective inside the kegerator as it is outside the kegerator. Either way, it tells you that you have co2 left. The only way to determine how much co2 you have left is to weigh the tank.