the 40 and 41/42 Fords only had one temp sensor. The port on the other head was plugged or used for the accessory hot water heater. The 59AB heads had two ports per head so the second sensor could be used.
The one post sensor works just fine without the second 2 post sensor switch. Why 2? The engine has two separate cooling circuits ,each with their own pump. The only element common to the two systems is the radiator. Therefore for the engine temp monitoring, we would like to know what is going on for both the left and right bank of the engine. Instead of having two temp measurements and thus two gauges, the system uses an "off-on" switch for one bank and a actual analog temp sensor for the other bank.
To explain this, one has to understand the King-Sealy method of instruments and that means that they do NOT use resistance or variable resistance as the measurement means. Put away your VOM as it does not apply to this system. Do not even think about resistance or Ohms. This is current driven with a heated bimetal breaker point system. (same for the gas gauge and oil pressure)
For a fail safe mode, the dash gauge reads full hot when off or no current runs through the circuit. That is why the gauge reads "hot" until you turn on the iginition and apply power to the circuit and the current flows "pulls" the gauge back to cold area.
In operation, the variable temp indicator sensor is a one terminal device like yours. It connects to ground through the brass body when operating and provides the variable sensing signal that the gauge decodes. this works perfectly with just the one sensor, however we are only measuring the temp of one bank of the engine, in your case the driver side. However we do not know the temp on the passenger side. Since the radiator is common to both, the inlet water temp is the same providing the water pump is actually pumping. In order to provide info about the passenger side, all we need to know is if the temp is too high for operation (as if the water pump on that side has stopped working (rare)). For this information, all we need is a switch that opens at approx206 degrees F to tell us it too hot, otherwise the switch will remain closed and when connected to the one terminal sensor in series, The system will display variable temp data from the other bank which is indicitve of the radiator cooling water temp. Should something happen in the other bank that drives the temp up to 206+ F, then the switch opens and therefore the gauge immediately goes to full hot on the display. It is an early version of an "idiot" light combined with actual temp measurements.
However the system works perfectly well without the the two terminal sensor.
I have only the one terminal sensor in my 40 pickup as that is the way all 81A engines were fitted
The proper part number for the single terminal sensor is 99A-10884 Which is made by King Seely is 6 Volt and used for all flatheads. The aftermarket sensors usually work OK but are not and will never be accurate. The dash gauge is very reliable and unless some turkey has burned it up with 12 Volts, they last forever. I think you have a sender problem. Find a real one and you will be happy. The repro's are not accurate.
By the way, 140 degrees is way too low for a proper operating temperature. That will kill an engine with water vapor from combustion gas washing the lubricant off the cylinder walls