Ok I know the water temp gauge in the dash is bogus, but what about the sensor?

I have my ems s2r running with the stock sensor, and yesterday i noticed the dash gauge reading high and my greddy water and oil temp gauge was between 65-85 degrees a/c was On. and on that day stop and go traffic every where.
Anyway suddenly my car bugs and doesn't want to start, looking at my gauges noticed dash gauge was on the red but my greddy gauges oil and water where like 85.

My question is if I have my ems running of the stock sensor and it reads that high the ems will shut the car down.
so is the sensor defected? And would that have a effect on the ems?
Is the sensor heat soaking?

I have to say i push start the car and turn off the a/c and the car ran again without problem the rest of the day.
The dash gauge showed a little lower but still above mid point and my greddy gaugee where at 70 degrees.

 

the stock water temp sensor for the ECU does go bad, its in the back of the water pump, green. NF02-18-840

the gauge uses a separate sensor under the oil filter.