There are different kinds of sensors
One is basically a nail, a metal rod that extends to the tank, Water, unless very very pure, conducts electricity, in nature water is NEVER that pure so if the pin or rod is under water the tank has to be at least that full.
(Works on the fresh tank, not so well on the waste tanks but that's another story, they "Slime" and the sensor is always wet)
Now.. With this kind of sensor the wire from the panel goes to a resistor pack (Small blob of epoxy) and wires from there sensor
The wiring diagram looks like this
The panel simply measures the resistance, the higher the less full.
If the wire between panel and resistor pack shorts, or the resistor pack shorts or the wires out of it short.. Well. always full.
Home is where I park it!