From my understanding in other vehicles, these sensors are just thermistors. 5v goes in and a lower village goes back to the ecu. If the circuit is open then there will be a fault, otherwise it's just a simple disconnect between actual coolant temp and the temp the ecu sees.
As mentioned it is one of the key feedback inputs to the ecu. Between coolant temp, airflow, crank angle, o2 sensors and throttle position it all comes together to optimize the engine performance.
-Mitch
'El Burro' 2012 Defender 90.
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