How do hard drive diagnostic tools know if a sector is bad?

Modern hard drives implement a system in firmware called SMART. This system collects statistics on the drive performance, and automatically avoids data loss by moving data away from bad sectors.

Diagnostic tools query the hard drive's SMART software to build a health check report.

Bad sectors are detected upon accessing the hard disk and are avoided and relocated by the SMART system.

I do not know ViVARD so this is a general answer.

SMART

SMART is a part of most modern drives. It registers when the hard drive sees a bad sector, when the seek or spin up time is more than normal. These are all indicators that the hard drive is failing.

The way the hard drive salvages a failing sector is due to error correcting codes (usually this is Reed-Solomon) that can rescue if a few bits are wrong. If many bits are wrong the hard drive tries salvaging by reading the sector over and over again. When it finally get it right, it saves it to one of the spare sectors.

Reading sector

The hard drive reallocates sectors with read errors to a set of spare sectors that are reserved for this. The OS usually does not see this, but sees the whole drive as having no errors. Only when there are no more sectors to reallocate to (or the sector cannot be salvaged) will the OS see the broken sectors.

But it is possible to bypass the error correcting (I believe it is different for each model - maybe ViVARD does this?). This way you can read the actual data on the drive. By reading this you will be able to see which sectors have errors - even if the OS sees no errors.