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The tip of the sensor should be completely in the flow of exhaust gases to properly read the mixture. With it partially threaded in you will probably have an exhaust leak and the car may not run as it should, probably running richer than normal.
Very similar to how people will space out the second o2 sensors on OBDII vehicles to trick their ECU into not throwing a code when the cats are removed. The spaced out o2 sensor only sees a limited amount of exhaust gasses letting the ECU think everything is okay.
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