Gearing is important when you install a kit. I didn't realize for years that my bike came with modified low gearing. I imagine it was a common shop mod to be quick in an urban environment (LA for my Puch).
Years later, after I put on a kit, I ran it up to who knows what RPM and soft seized twice (temp/tach now installed). Turned out that my rear sprocket was 15% over stock.
If you add significant power, you have to gear up or you will turn too fast for a stock bottom end.
I suspect that head temp sensors can fail to account for case heating. Maybe your sensor is at 400, but the cylinder is being fed hot mixture from the boiling case.