I don't think the sensor itself might cause limp home, but if it's hiding the engine overheating that would cause a drop in power. Especially if you're working the engine hard when it happens. I'm also fairly sure that anything that causes a limp home will bring up the engine management light and probably that really annoying beeping sound that SEAT's seem to have. You didn't mention any light?
And I also thought limp home would limit things to 30-40 in top gear, is that what happened?
If you can get the codes I'm assuming you have VAG-COM, can you extract the oil temperature from the measuring blocks and see if your engine got a bit hotter than it should have been?