Hi,

You might take a look at the gray connector on the fire wall.
The engine side harness connects there and it has a wire in it that runs to the Coolant temperature sensor.
Starting in 1984 these wiring harness have what is considered "biodegradable insulation" on their wires. It may not have ended until the 1989 year. I have a 1984 sedan and a 1986 wagon that each one of those harness. The 1984 was repaired before I bought it.

On the '86 I think there was two of them in there that caused a weird issue with the car running because as I remember I think it affected the ECU Coolant sensor reading.

The worst wire I found was the yellow one that went to the engine Coolant sensor for the gauge. I only replace one wire because the other one would not budge. My thought was it split in two directions.

I opened up the harness for about eight inches to get pass a joint to solder on a new wire. I then pulled out the bad wire and it pulled in the new one.
This stopped a rough running issue. I can only think that two badly insulated wires were touching each other.

In your case, that yellow wire might be touching a wire that either goes through a resistance to ground or is being over powered by another circuit wire. This could be circumventing the resistance to ground for the temperature sensor.

You do not have to be so elaborate to check this idea out. Just run a wire on the outside of the harness and hook it on one side or the other of the gray connector and see if it stops going to hot immediately.

So that my suggestion.

Phil