Optical tactile sensors offer a promising avenue for advanced sensing and perception. We focus on frustrated total internal reflection (FTIR) tactile sensors that utilize time-of-flight (ToF) measurements. We analyze the complex behavior of ToF signals within optical waveguides in the time domain, where phenomena like internal reflections and scattering significantly influence light propagation, especially in the presence of touch. Leveraging this analysis, we develop a real-time processing algorithm that enhances FTIR tactile sensing capabilities, allowing for precise detection. We evaluate our algorithm on an OptoSkin sensor setup, demonstrating a significant improvement in multi-touch detection and contact shape reconstruction accuracy. This work represents a significant step towards high-resolution, low-cost optical tactile sensors, and advances the understanding of time-resolved light transport within waveguides and in scattering media.