I did a search on this, and the only thing I found was a forum post stating the sensor is a myth. I used to deal with these issues working for a tax agency (not anymore).
Red dyed fuel will stain your engine and internals. I've dealt with a few calls from garages that reported the usage in pickups. As a state agency, we only sent a letter demanding the tax due (no penalty or interest) on the estimated use of diesel over a year (can't remember the formula, too long ago). It worked out to around 800 gallons for a year, IIRC. At 25 cents/gallon, the bill would be $200. The irony is, since the vehicle was often in the garage with engine problems, and the discovery was due to red stains, it voided any and all warranties for engine damage. I've seen folks billed by the garage for well over $10,000 for use of dyed fuel in violation of warranty. They could have driven the truck for 50 years on taxed fuel for that rate.
I think the “dye pack” is a misunderstanding of the urea injection system on most new diesels. The special catalyst and urea injection treatments of exhaust meet much higher emission standards.
“I did a search on this, and the only thing I found was a forum post stating the sensor is a myth. I used to deal with these issues working for a tax agency (not anymore).”
I checked the manual, which, BTW, is TFU. It doesn’t say anything. However, the salesman seemed sincere in his warning and he actually works for VW, so I’m guessing he’d be inclined to tell the truth. There are color sensors for fuel, because I looked those up. As to the dye pack, why would he lie? However, it’s not worth the tax savings if the car was designed for one fuel and you use something with different characteristics. I did thoroughly clean the tank and, (thank God) I filled it at $1.98 per gallon. I’m still using it. It should last to later this year.