The thermostat is the inlet to the motor. The back of the thermostat sits in the bypass passage, which loops hot water back from the head. So it's reacting to head temperature. But the front of the thermostat faces the radiator outlet, which is the coolest water in the system. When the thermostat is open, the sensor just downstream is seeing cooled water.

The hottest water temps are in the head, which is where the gauge sensor is located. The design delta T of most cooling systems is 20 degrees, but could be less depending on load, ambient conditions and wear.