Does the OP have a separate reader or the plug in circuit board unit?
You can't plug a reader into the KP2 directly and have it buried in the unit. The integral prox only fits in the original KP's. If you want to use prox on KP2/KP3's you need the separate pigtail and need to wire those to that, then plug in to the reader.
You use the KP's open collector to drive the LED on the reader for lock/unlock status, then the strike goes back to an output controlled by the panel.
The output on the KP's (all) does not have the ability to sink the current to switch anything but low mA loads.