Actually, the thermostat controls the temperature at which coolant can flow out of the block so for all practical purposes, it sets the max engine temperature.
That part of your statement is incorrect. The thermostat attempts to control the
Minimum operating temperature.
If the cooling system is adequate to regulate temperature under mild load conditions, but inadequate under heavy load or high ambient heat conditions (this describes most pre-70s vehicles), you might be able to buy yourself a couple more minute of high load operation before the engine overheats by running a 165F thermostat. It won't change the fact that the engine will overheat, because that's up to the cooling capacity of the system, but that's often enough to get you back from the end of a drag strip, or up to the top of the grade you're trying to climb.
The KLR's with temperature Gauges and stock & standard cooling systems (including the 157 -162F rated thermostat) will roll down the open highway all day long in 60-80 F ambient air temps with the temp needle hovering at about 1/4 scale (160'ish).
But when one rolls into town and has to stop for a mere minute or two at the first stop light the temp gauge will invariably climb right up to at or slightly above 1/2 scale (210'ish). Then the fan turns on & off and basically keeps the coolant hovering at its switch set points of 214-189F (and this is at the Bottom of the radiator, not temp gauge sender).
One could install a Thermo-Bob and use the OEM 160F thermostat and it would warm-up Quicker in the morning & remain more stable on the gauge in those first 20-30 minutes of operation. But rolling into town & being stopped at the first stop light it would still climb to the cooling fan set point as described above.
With a 195F thermostat installed the engine would simply not chill back down to 160F upon regaining sufficient road speed which cools the radiator & its fan switch.
Again, a 160F thermostat
can not give any real advantage to reduction of possible over-heating (260F+) in these KLR engines. That is controlled by radiator size, coolant flow speed & air flow speed. The increased radiator size of the Gen 2 & 3's ensures that.
If you are climbing a mountain pass & the thermostat is wide open & the cooling fan is running because the bottom of the radiator is above thermostat temp, correct. Doesn't matter which thermostat is installed from that temp up, the engine will either stabilize at a higher temp, continue to heat, or cool down after load is reduced. Neither system is too hot until 260+F.
The thermostat in every water cooled internal combustion engine that operates using a wax capsule (which is every engine coolant thermostat that I'm aware of) is in an open or closed state, there is no variable attenuation.
I'll say
that is incorrect.
I'll suggest that you ought to dangle a thermostat & a thermometer into a kettle of Coolant/Antifreeze and watch how slowly & gradually the wax capsule attains fully open or fully closed. The temp number on them is simply the beginning of opening (+/- a few degrees). They are perfectly happy to operate in partial open position if they receive Steady temp coolant which is what the Thermo-Bob provides.