I trust that the following post will throw some light on the Oil Level Sensor, with the associated confusion, inconsistent readings, and 'oil overfill' issues. I was prompted to research this after getting an 'oil overfill' message 8 months after a service without adding any oil.
I trawled through a number of other forums (Mercedes, BMW, Volvo) and they all had identical comments about the frustration and inconsistency of oil level sensors, and a craving for the dipstick.
The key to understanding this issue is:

The Oil Level Sensor is NOT an electronic dipstick.

Imagine you have a swimming pool with a uniform depth and you want to measure the depth of water. Some people are diving in, some swimming, some getting out, and others just generally splashing around. There are two methods:

Method A, Dynamic Method: Place a sensor to take thousands of measurements. Use an algorithm to account for temperature and calculate an average figure. Call this the swimming pool water level.

Method B, Static Method: Wait until everyone's gone home and use a measuring stick to measure the level.

It may come as no surprise that we have Method A, Dynamic Method as the default. The oil level sensor is taking up to 3,000 readings per 100km while the engine is running. It generates a characteristic curve to compensate for temperature and RPM, then calculates an average figure which is called the oil level. This is what is presented to us when we view Vehicle Info/Oil Level. Sure, we can view the level via the Static (dipstick) Method, but this requires our intervention - bonnet/hood open, select Vehicle Info/Oil Level, press CAN button twice within 2 seconds.
Why the system is attempting to measure oil level while the engine is running, with all the associated influences such as the inclined position of the vehicle and lateral and longitudinal acceleration is beyond me. In my opinion, the Static Method which we would all understand as the dipstick method would make more sense as the default method.

Which begs the question, why have an electronic sensor at all? Well, from what I can tell, the dipstick tube also acts as a vent for the crankcase, releasing fumes into the atmosphere. Multiply this by hundreds of thousands/millions of cars and this may be significant. If nothing else, it improves the eco-credentials of the vehicle manufacturer.

If you want further reading, go to the Hella website and search for 'Oil Level Sensor.'

From now on, I'll be using the Static Method to measure my oil level, hoping I'll get more consistent and meaningful results.

 

I don't think the oil filler cap or dipstick tube are vented to the atmosphere. If the were the PCV system wouldn't work. For most modern cars if the engine is running and you take off the oil filler cap the engine will stall due to too lean a fuel/air mixture.

 

Yeah, I wasn't sure about this either. The main selling point of electronic sensors seems to be the continuous measurement of the oil level.

 

I remember my Dad's Silver Clouds (60's vintage) could give an oil level reading at any time. All you had to do was push a button on the dash and one of the gauges changed function. I'm not sure how they set it up, but it was convenient.

 

Getting an accurate dipstick reading with thin-*** oil isn't all peaches and cream. I have a Toyota FJ that uses 0-20 synthetic. The oil is so thin that is sticks to the dipstick half way up making the level reading quite ambiguous, until the oil discolors a bit. All things considered, I prefer the electronic method.