Hot coolant naturally rises over cold coolant. So even though there's no flow directly past the sensor when the tstat is closed, the warmer coolant will still make its way to the top of the system, which is why they put the temp sensor there.
That sensor location is also why the heater core and intake warming circuits run back to the cold side. Both of those circuits are dumping heat, so the coolant coming out of them will be cooler than the actual engine temperature. If this cooler coolant was introduced to the system at the top, it would mix with the hot coolant around the sensor, giving the computer an inaccurate idea of how hot the engine was.
Figuring out the rest of the coolant flow was more difficult than it had a right to be, mostly because flowcharts were a terrible way to try and explain this system, but also because Nissan doesn't seem to understand them either. Now that I'm really looking at them, the flowcharts in both the '95 and '87 manuals are just straight-up wrong. They show the water pump only being fed when the tstat is closed, and the tstat and rad forming a loop on their own, sans pump and engine, when the tstat is open. So, yeah, that ain't right.
The Fronty flowchart makes a lot more sense. To confirm that it's the same as the VG30 cooling system, I pulled up yet another manual, this time for the '85 300ZX (which also had a SOHC VG30). That diagram looks very similar to the Fronty diagram, apart from the turbocharger of course. So, yeah, near as I can tell, that Fronty diagram should be correct for this application.
It looks like the end of the thermostat is what blocks off the bypass hose. So as the thermostat opens, it's allowing more flow from the radiator, while throttling flow from the bypass hose. (Kinda like the hot/cold mixer knob in a shower.) This one-wax-motor-moves-two-valves thing would've been explained much better in a cutaway than it is in those stupid flowcharts! I did find a cutaway in the '93 300ZX manual, so check that out if you're struggling to visualize this--though that car has the DOHC VG, and I don't know what else changed on that variant, so don't trust it too far.
Hopefully that explains it! I did not expect the rabbit hole to go that deep, or the rabbit at the bottom to be that vicious.
I wonder if the borked flowcharts were drawn by the same guy who copy/pasted that fuel pressure test.
(For those who don't know--the fuel pressure test in the WD21 service manual mentions a fuel pressure regulator control system, which was not fitted to these, but was present in some early 300ZXs.)