Bad sensor or bad gauge?

I'm in the Teflon tape is not the issue camp.

As a plumber have you ever pulled apart a pipe and not been able to see metal through the tape?

IMHO it's easy to test. Check resistance from the body of the sender to ground. If you have more than 0.1 to 0.4 ohms then there might be an issue (basically what the meter reads when the 2 leads are shorted together)

I’ll see if I can find my old electric meter tonight.