I don't think the ECU uses the O2 sensor feedback to determine loop status, just fuel mixture. I believe the open loop mode is based on engine temp sensor (cold start) and throttle position sensor (WOT). I could maybe see the ECU going into open loop and ignoring the feedback from the O2 if it's out of range, possibly as some kind of factory programmed "safe mode". I suppose it all depends on the particular engine management program. This is just my best guess.
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