I guess I don't have a lot of experience with these trannies (I have an automatic), so I can't say whether you'd have any issues. But I suppose if the sensor did get torn off, you'd probably see something going on with the temp gauge to clue you in before you did any major damage.
Its not the best situation, but if the sensor did get ripped off then I imagine that the reading would drop to 0 - I guess it would be kind of a dummy light.
I thought I just had would be put a 90-degree adaptor pipe in there to try and reduce how much protrudes below the structural member.