The sensor is on the engine but on the water flow not the oil. Apparently no engine, car or tractor has it on the oil system. Problem is that when there is NO WATER in the system, the sensor does not pick up the heat as efficiently, thereby allowing it to overheat substantially before any signs are shown. Perfect storm situation - Water leaks out while engine is not running, no sign of it unless you are lucky enough to have it parked where it can be seen, but not on dirt or rocks. Then you check the coolant reservoir, it is fine beach the siphon does not work when below the pick up point. Then the heat indicator does not go up because it has no water flowing past sensor. Then you are running along all fine and KABOOOOM, engine locks up.
I see the problem, and I think you have a valid complaint.....but unfortunately it's industry wide. The problem that got you, is the same potential problem on every fluid cooling system on every engine I can think of.....at least all the ones I've seen in some 60 years of mechanical work. Basically it sounds like you have put your finger on a major oversight in the engine cooling industry. Someone originally got their physics wrong, and then everyone copied each other.
As a result, if there is a leak anywhere low on the radiator or lower hoses the temperature sensor is going to be looking at air temperature rather than engine temperature. There is not way the existing temperature sensor/gauge can warn the operator, and a seized engine is the probable result. All it takes is one pinhole leak.
It sure looks like the whole auto, car, truck, tractor, and industial engine industry has copied that same design mistake that got you, but I'm afraid that their defense is going to be that the design is accepted as "common practice" - even though we now know that the design is wrong.
I wonder why it took so long for such an obvious design mistake to surface? I've not even heard it discussed in mechanical bull-sessions .... even though every mechanic has probably experience a similar problem where a temp sensor sits in a trapped air bubble which makes it send the wrong temp.
I hear some posters with arguments that one should check the radiator fluid each day before starting up, but how realistic is that? My wife probably isn't going to open the hood and take the radiator cap off to check the fluid level each time she starts the car, is yours? How about each time you start the car when doing errands in town? And you would have to do it that often to be sure of spotting the problem.
Or what about when driving down the highway? How often should we pull over to be sure that the radiator is still full of water?
Bottom line is that the way the coolant temperature sensor works needs to be changed throughout the industry. Oil temperature doesn't help as much. Has anyone got any good ideas? How about a simple fluid level gauge?
Now that you have made us aware of the problem, there is probably a fortune waiting for someone who comes up with a simple fix.
rScotty