I do not know where the FZ1 coolant temp sensor is located, but on the FJR it is not actually in the engine block. It is located on the right end of the metal coolant stand-pipe above the valve cover, the one you remove to do a valve check. The Thermostat is further downstream of the sensor, in the neck of the radiator fill pipe. I think that what you see on the gauge is representative of the temperature of the coolant in that standpipe. Changing by 30-40 degrees in a period of 30 seconds or more is not unreasonable.
When the temp reaches high enough to open the thermostat a little there would then be a period of flow of hot coolant that was in the engine passing through the pipe, until, eventually, the ice cold coolant from the radiator has passed all the way through the engine, past the sensor, and is felt by the thermostat to close it. The radiator is sized to be able to cool the coolant sufficiently in the worst situation, with warm ambient temps. This means that with cooler ambients the coolant in the radiator will be very cool when it is called.
So that is why you are seeing the temp cycling: There is some hysteresis built into the system due to the component locations.