I have the 104 engine E320 1994 and the engine temp sensor is on the water pump not on the top but down on the side. The temp sensor is controlling fuel mixture so the mixture is rich when the engine is cold and lean out when the engine get warmer.

Could this stop functioning correctly without triggering a code?

thanks

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1993 300E, 2.8 M104 .....

I guess so if the sensor give the wrong resistance, are the car smelling gas you should check the plugs do they have signs of being wet ( running rich ) or white from fuel starving if there is any sign of rich running , you might need to change the plugs also. If I remember right so have the engine lack of power when you are driving the car. If the plugs are white you must take a look at the fuel pressure and fuel volume, but then you should have hesitations at wot ( wide open throttle ).