Is that what most people do is adjust the needles? I would think that would throw off low and high sides.
Yes, I would agree that the far end readings would perhaps be incorrect. But without the actual coolant temp reading with an IR gun at different points to compare, I would have no clue. Only those who use this "98" F-Body sensor would know.
Since I do not the sensor for measuring ohms at various temperature exposures, nor having the dash from a Camero / Firebird from 98, it is only a suggestion for a quick fix. The use of a PTC thermistor is high resistance when cold, then drops in ohms as it gets hotter.
Newer GM use the "Stepper Motor" system and that changes everything.
GM eSI service information shows the 3 wire sensor, with 5 volts to cavities B & A (YEL & BRN) is for PCM's coolant temp info for timing, fuel mixture, fans, overheat protection mode and OBD-II. While cavity C (DK GRN) is for the instrument clusters coolant gauge. The problem is the diagnostic flow chart for chasing down a gauge issue for inaccurate or inoperative.
The flow chart using a "J-33431-C" adjustable ohms potentiometer in a box for diagnostics. With the "J" tool attached to ground & terminal A, you adjust the tool from 380 ohms to 55 ohms, with key on, engine off. Watching the gauge register (160 F) and (200 F) respectively, does it read correctly? Yes, replace coolant sensor. Inspect, test and repair circuit wire = yes / no. Replace IPC.
As you may well know, the GMT400 is a paper service manual only. I don't have one to compare it to in the coolant temp IPC chart. Thus, I don't know the correct resistance versus gauge reading.
Yes, I am guilty of dealership diagnostics, using best practices, special tools and the bible...GM's diagnostics flow charts.
My suggestion for re-locating the needle is only "SWAG". Until someone chimes in on their actual experience with this one model year "Dual Purpose" coolant temp sensor, I am just trying to be helpful. Remember, this "F" body uses an "LS" engine.
It is a fault engrained into my brain to use what works after 20+ year in small shops with 3 tons of "Mitchells Manual" on a shelf that was 30 foot long to cover Import / Domestic. The dealer had accurate diagnostic since they built it. They work for me, because a repair that fails is a come-back. You don't feed a family of 6 on come-backs. I am not bragging nor am I perfect and take no offense by the question, which is a good one.
In the age of YouTube and internet resources, like this forum...I can only provide a possible option for a temporary fix. If the gauge is straight up when running normal operating temperatures, verified by an IR reading when the thermostat opens and the upper hose quickly get hot. I would feel reasonably comfortable in driving this vehicle ever day. Cold, who cares. Running temp at normal middle position, good. Too hot and gauge show it, tells me I need to take action...regardless of accuracy.
Side Note: I find the strategies of engineering very interesting. During the course of my job, 50+ employees and myself found ourselves in the test lab. Many line of code are transferred from year to year so as not to re-write everything from scratch each year. Some info was left in the PCM for scan-tool use. An example is failure code suffixes, like P0112 (Intake air temp (IAT) low. They left information the PCM can produce to provide additional information with the code, for field diagnostics. So, P0112-01 = ground. During startup, the PCM is very busy, checking each circuit to sensors that are required to keep emissions in check. This is done thru Voltage drop, resistance, amperage use, operation while running in certain conditions. EGR, EVAP, Misfire detection, transmission slippage, etc.
They drop a new generation engine into a stock older vehicle, epoxy temp sensors everywhere on the engine, then run bundles of hundreds of wires into an interface module, then split into two laptops sitting on a carpet covered board bolted where the passengers seat would be. They run it sitting still, driving and on the dyno as well as wheels off the ground. Then repeat. To create a diagnostic flow chart for repair, they disconnect a sensor or device, and check to see what the PCM does, the codes, history and a screen capture of "PID's" up to 5 of them. They write and re-write each fail code and the diagnostics that goes with each one.
Also, many failures require are back-up program due to the loss of data while a successful start-up. There is a default to "Speed Density Operation" if the MAF signal malfunctions. Over-Heat-Protection result from a simple collection of data from; ECT, MAF, TPS, Gear Range, and customer abuse. The PCM will shut off A/C, kill 1, 4, 6 and 7. Then down shift if allowed, reduce torque via spark timing, turn both fans on high speed. These are just a few examples of strategies used by the PCM, created by engineering that help eliminate engine damage or keep the customer from entering into "Tennis Shoe" mode...walking home, instead of driving!
I feel lucky the last seven plus years of my career in the automotive industry by having the chance to see these things, ask questions and learn behind the scenes activity completing most of my own curiosity. I can only share some of what I know. Now, I can complete even less for myself due to....well, it's my pain problem now.
Sorry to be long. You asked what time it is and I told you how to build a clock!