The temperature switch at the top rear of the head is for the temperature light. If it trips, the light will illuminate, and then at the same time send the gauge to maximum hot temp (the monitor controller controls this, not the sender directly). A short in the sensor or wiring can also cause this. if it is the sensor, then unplug it and see if the issue goes away. The single wire sender at the thermostat housing is for the gauge. Both of the above communicate directly with the monitor. The two wire sensor at the thermostat housing is for the ECU to monitor engine temperature and it does not affect the gauge or the indicator light, but it will light the check engine light in an overheat event. Is your machine in fact overheating? Confirmed with a temp gun?