I came to the LC world from the BMW world where overheating and blown engines (on M52/M54 engines) were rampant due to plastic cooling pump impellers and other plastic parts in the cooling system.
The 2UZ does not have these design faults. BUT I'm wondering if the coolant temp gage is "buffered" like on the BMW's, where it would stay in the middle until the engine was WAY too hot, then quickly jump to the hot side and light up the red LED. You had no warning.
Modern engines vary coolant temp within a range. I've read that the dealers did not want customers coming in and complaining about "temp needle moving around", so they LIE to you by falsely showing a perfectly stable coolant temp - UNTIL IT IS TOO LATE.
One thing that helped was a digital gage, hooked up to OBDII, displaying the coolant temp. If it was running too hot you would notice. That gave you some time to get off the road and shut down. On the BMW's I had the P3Cars unit.
On my 2006 LC I have the ScanGage II.
Was this (no warning of rising engine temp) a factor in your engine damage?
This is a common practice in all OEM temp gauges I'm aware of. The 2UZ is buffered and so is almost all (maybe literally all?) factory coolant gauges are designed to work. I do not believe there's much ill-intent behind it - quite the opposite.
I've understood that to be to exactly as you say - prevent unnecessary concern and complaints. The temp gauge is simply a problem fabricator if it reports in a linear fashion. This is because quite simply.... the average car driver is ignorant. The average car person probably has no clue that the coolant will be cooler when driving fast and hot when idling. Or that coolant gets colder when you turn on cabin heat. All these fluctuations are opportunities to make a problem out of nothing. Too many false alerts is much worse than benefitting the very few sharp drivers that will know that 178F-204F is fine, but 209F is a problem sign - unless of course you're in Phoenix and it's 118F outside and you've been idling on the highway in traffic for 40 minutes in which case 209F is barely a concern. Maybe even impressively good. I digress...
The intent of that gauge is not to give you early warning when there might be a future problem in some scenarios. It's to warn you that critical damage is about to occur or has already occurred no matter what situation you're in. If you drive an unreliable car and trying to catch catastrophic failures in the very brief moments before it all goes to hell, this might be annoying, haha. I was once that annoyed person daily driving a variety of mk3 supras for about a decade always ready for a blown head gasket.