It's odd that a sensor would overheat like that. Check for signs of frayed wire where any input may have shorted. I suppose if there's contacts inside they could have become damaged causing it to short as well. As to if you need it, I would make sure it isn't required as a limit switch somehow. Otherwise, every now and then I think a tilt/trim gauge would be good to have, but then can't think of how that info would serve a practical purpose. I'll trim based on conditions until my boat is running how I want it to, not until a desired angle reading. I'll know I'm at my trim limit when the hydraulics become louder trimmed in (max travel), faster trimmed out (now in the tilt range), or heat sensors go off (practical limit of trimming out).
