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One Component, Two Failure Modes
Your thermostat's job isn't complicated: spring open when the engine is hot, and stay closed when it's cold. These two states also reveal the two common ways that a thermostat may fail. Thermostats typically stop working when they become stuck, which can happen while open, closed, or anywhere in between.
Manufacturers design their thermostats to fail in a safe or open position. Thermostats that fail open allow a steady stream of coolant into the engine from the moment you turn the car on, which prevents your motor from reaching its optimal temperature. Cold temperatures can cause your car to run poorly, burn more gas, and even accelerate wear on internal engine components.
While there are severe consequences to your thermostat sticking open, they pale in comparison to a thermostat that's stuck closed. In this case, the coolant won't flow through your engine at all, causing it to overheat rapidly. This situation can result in rapid engine damage, especially in warm temperatures or if you attempt to drive the car while your thermostat is stuck.
Thermostats rarely fail in the closed position, but it can happen, and it's critical to recognize the signs of overheating and act quickly.
This matches my understanding of the device
(and my experience)