Fuel Gauge malfunction and fuel sending unit

Before purchasing 2006 California Gen2, 131k miles, Check Engine Light comes on with code P0420 CATALYST SYSTEM EFFICIENCY BELOW THRESHOLD.
Used car lot seller takes it to local popular Toyota dealer knowing the vehicle is still under the California 15 year/150k mile warranty. Dealer gets the same P0420 code, replaces the entire Catalytic converter along with a recalled Hybrid Electric Water Pump. Toyota pays entire $2400+ bill. CEL is off, all seems fine.

Two days later, the Combination Meter Display goes dark; I speak with Toyota HQ who tell me the vehicle is over 1 year out of the "Warranty Enhancement" period (9 years) so it is not covered. Seller takes unit out of dash to qualified module repair facility. He pays $99. All working fine.

Next day CEL comes on. Oddly my OBD-II reader cannot connect to the Prius, so I take it to a dealer closer to our home to get a reading. For $49 they do a thorough inspection. They get P0455 and P0441 codes: "Evaporative Emission Control System Incorrect Purge Flow" and "Evaporative Emission Control System Leak Detected (Gross Leak)". They perform a full smoke test and discover a leak at the top of the fuel tank. Pulled out rear seat to discover incorrect repair with a yellow bypass wire running through the sending unit seal (see photos attached taken by Toyota mechanic). Dealer says since the unit was tampered with it voids the warranty (fair enough) and would require replacing entire FSU with fuel tank; about $1000 with labor. My question to you Prius pros: what is up with that wire? Is this a known "remedy" for the famous fuel gauge issue? The Toyota mechanic thinks the fuel gauge wasn't operating correctly and the previous owner ran a bypass wire. But even if that were true, wouldn't this all fall safely under the California Emissions Warranty, so why mess things up?