Correct. The sensor is located where it can tell the computer what the air temperature being delivered to the throttle body is. 'Ambient' is probably not the best terminology for what this gauge reports. The ambient condition for the rider is not the same as for the throttle body.
I think we may be missing the point here. The temp sensor needs to have an accurate reading of the air going into the throttle body. Tamper with that reading and you're not going to get the correct fuel/air mixture into the engine. If you want a more accurate reading for the temperature you're riding in, then it needs to be coming from a separate system.
Ron, my apologies if it upsets you that I blended two of your replies.
You sir are quite correct that referenced ambient temp, and also ambient pressure, are utilized by the engine management computer to obtain a correct air / fuel ratio for conditions at that moment.
Contending with the inaccuracies of ambient temp is something I am very familiar with, and made serious modifications resulting in far better performance.
Therefore, while the ambient temp is indicated, unfortunately, the difference between actual ambient temp, reported ambient temp, and induction air temp can have a large variance.
The current setup on our 2014 RTS has a relocated sensor. Doing so, decreased engine power output. After some time recording data regarding engine induction temps, it became obviously apparent how the engineers did try for a true cold air intake, but in operation failed miserably.
To eliminate some of the issues, the newest body style RT series no longer runs a true cold air intake. The design team retained previous model year airbox, but eliminated the duct that picks up air, forward of the radiator. Bad part of these newer versions is that the air, heated by the radiator, flows up into the airbox.
So our setup, air sensor has been moved, and after a lot of effort and expense, I was able to get induction air temps much lower, and the engine generates more available horsepower. To the trained ear, the change in exhaust note from the true cold air induction, and along with that a far more correct AF ratio.
Mike, the Blueknight chopped up his airbox and added a plumbing elbow that hangs outside the bodywork. This almost mimics the latest gen RT series intake. Better, but heat soaked parts eliminate any and all gains.